JUDGMENT

1. All these appeals arise out of a motor vehicle accident which occurred on 22-5-1988 at KM stone No.362/6 on Hyderabad to Nagpur road on National Highway No.7 (at Sadasivnagar). Several persons were injured and several persons were died due to the said accident. Therefore, the injured persons and the legal representatives of the deceased filed claim petitions before the Motor Accidents Claims Tribunal-cum-District Judge, Nizamabad under Section 110-A of the Motor Vehicles Act against the owner of the lorry and the Insurance Company with which lorry was insured. After enquiry the Tribunal passed common award dated 13-4-1993 in OPNos.163, 164, 187, 188, 192, 256, 257 and 261 of 1998. Aggrieved by the award, the owner of the lorry i.e., M/s. Southern Roadways, represented by its Manager, Vijayawada in OP Nos.261, 192, 187, 256, 257, 164 and 163 of 1988 preferred CMANos.269, 380, 382, 377, 379, 384 and 383 of 1994, and the Insurance Company in OP Nos.261, 256, 164, 163, 257 and 192 of 1988 preferred CM A Nos.1662/93, 1711/93, 1731/93, 173093, 11/94 and 1733/93. As common questions of law and facts involved in all these appeals, I am disposing them of by this common judgment.

2. The brief facts of the cases are that the lorry bearing No.ABK. 2956 belonging to the first respondent which was insured with the second respondent Insurance Company met with an accident at about 5.40 p.m. on 22-5-1988 in the limits of Sadasivnagar at KM stone No.362/6 of Hyderabad to Nagpur road on NH 7. At that time Chakali Rajubai, Chakali Buchanna, Chakali Pochamma, Chakali Rajanna, Chinna Gangaram, Chakali Lambadri, Gouri Gangaram were travelling in the said lorry. According to them, they were taken as coolies by the driver. It is the further case of the petitioners that after boarding the above said persons, the driver of the lorry drove the vehicle with high speed and in rash and negligent manner which resulted in accident in which six persons were died and two persons were sustained injuries.

3. The first respondent-owner of the vehicle filed separate counters denying the allegations made in the petitions and stated that they never employed the deceased and the injured as labourers, and the deceased and 22 others forcibly entered the cabin of the lorry inspite of the objection and resistance by the driver. Though the driver of the lorry drove the vehicle cautiously there was lot of disturbance and commotion in the cabin of the lorry which caused obstruction to the driver and all of a sudden one tourist bus came from opposite direction and was about to dash against the lorry and to avoid accident, the driver of the accident vehicle turned it towards left side but the lorry hit against a tree which resulted in accident. The driver is not authorised to take the passengers in the lorry and the act of the driver in taking them in the cabin are unauthorised passengers, as such the owner is not liable to pay the compensation. Even if the Court comes to the conclusion that the accident was due to rash and negligent driving of the driver of the lorry and the claimants are entitled to compensation, it is for the second respondent-Insurance Company which liable to pay the compensation.

4. The Insurance Company filed its counters denying all the allegations and stated that the liability of the Insurance Company is to be strictly governed by the terms and conditions of the policy with which the vehicle is insured. Unless the conditions covered by the policy with which the vehicle is insured are fulfilled the Insurance Company is not liable to pay any compensation.

5. On adjudication of the claims, the Tribunal on issue No.1 in all the OPs came to the conclusion that the accident took place due to the fault of the driver of the lorry basing upon the oral evidence of PWs.5 and 6 and Exs.A1, A2, A4 and A6. On issue No.2, the Tribunal held that the passengers were carried by the driver after receiving fare from them, and Ex.B3 does not contain any specific condition prohibiting to carry passengers on hire and awarded compensation directing the owner as well as the Insurance Company to pay the compensation jointly and severally."

6. Sri S. V.R. Somayajulu, learned Counsel for the owner of the lorry urged the following points:

(1) There is a specific direction given to the driver not to allow passengers, hence the owner is not liable to pay compensation.

(2) Even then if this Court comes to the conclusion that the owner is also liable to pay compensation, as the vehicle is insured with the Insurance Company, the Insurance Company is liable to pay compensation jointly and severally. As the Insurance Company has not raised any plea stating that there is no coverage to cover the liability of the contingency, it is not open for the Insurance Company to file the appeals.

7. With regard to the negligence, teamed Counsel has not disputed the finding arrived at by the Tribunal. He also relies upon Exs.B1 and B2 and also the evidence of RWs.2 and 3. Ex.B1 is the circular dated 19-4-1986 issued by the owner of the lorry i.e., Southern Roadways to all the drivers working under them. It is stated in the said circular, if any driver allows the passengers unauthorisedly while driving the vehicle on Company's work, action will be taken against them including dismissal from service. Ex.B1 was served on the driver of the accident vehicle. Ex.B2 is another notice issued by the owner of the vehicle. The contents in Exs.B1 and B2 are same. RW3 deposed that he received Exs.B1 and B2 at the time of his appointment in 1982. He further stated that near Beebipoor Tanda about 20 to 30 persons stopped the lorry and forcibly entered the cabin and there was no negligence on his part. RW2 who is the Manager of the first respondent-owner stated that Ex.B1 was issued by him and Ex.62 was issued by his predecessor.. As per that circulars the driver is not authorised to take the passengers in the lorry enroute. The driver is not in their service. They dismissed him from service immediately after the incident. In the cross-examination, RW2 admitted that the driver did not report the Police about the forcible entry of persons into the lorry and about the accident. Apart from the same, in the counter filed by R1/Southern Roadways, it is stated that on the date of accident when the lorry was proceeding from Nizamabad to Kamareddy side about 23 persons stopped the lorry at Bibipur Thanda and forcibly entered into the cabin of the lorry stating that there are no buses on route and they have to go to Markal village to attend some marriage, inspite of objection and resistence by the driver. As the act of the driver is not authorised by the first respondent/owner, they are not liable to pay any compensation.

8. Sri S.V.R. Somayajulu, learned Counsel for the appellant/owner contended that if the driver unauthorisedly permits the passengers violating the instructions, they are not liable to pay any compensation for the unauthorised act done by their employee. In support of his contention, he relied upon the following decisions:

(1) Moturi Krishna Rao v. Senagala Venkateswara Rao, 1986 ACJ 936;

(2) Jiwan Doss Roshan Lal v. Karnail Singh, 1980 ACJ 445; and

(3) Mukho Devi v. Syed Hassen Zaheer, 1972 ACJ 63.

9. This Hon'ble Court in Moturi Krishna Rao's case (supra) held that if the driver who is not authorised to carry passengers commits any fault, owner is not vicariously liable to pay compensation. It was further held that a lorry which was engaged for carrying empty milk cans and driver took the deceased as a passenger in the lorry, the lorry met with an accident and the passenger died, repelling the contention of the owner that the act of the driver was outside his authority and he was made responsible for the negligence or wrongful act of the driver, the Division Bench held that the owner is vicariously liable for the reason that the driver in giving lift to the deceased was acting in the course of his employment, it was not the owner's case nor is there any evidence to show that the driver was expressly prohibited from taking passengers, by allowing the LPA filed by the claimant. The Punjab and Haryana High Court in Karnail Singh's case (supra) held that when the driver allowed a passenger to board the truck in contravention of statutory provisions and without authorisation of the owner and the owner is not acquiesced in the carriage of the deceased, held that the owner of the truck cannot be saddled with liability for unauthorised carrying in the truck. It was further held :

"Reverting back now to the established and the virtually undisputed findings of fact in the present case, it would be manifest that in unauthorisedly carrying Pritam Singh, deceased in the goods truck its driver Karnail Singh was plainly infracting Rule 4.60 and therefore, committing an offence punishable under the Act. In such a situation there can obviously be little question of any authorisation by the owner of the truck to carry Pritam Singh in particular or any passenger in general in contravention of the statute. In any case, in the present record, it bears repetition that there is not the least evidence that the appellant-owners of the truck had any way authorised or acquiesced in the carriage of the deceased-Pritam Singh in the truck as passenger. Therefore, Pritam Singh must be deemed in law as a trespasser qua the appellants in the vehicle. The appellant-owners therefore owed no duty of care to him. (Para 8)

The Delhi High Court in Mukho Devi's case (supra) held as follows :

"Since admittedly the car was being driven by Lazrus who was not a licensed driver, the Insurance Company is not liable to pay any compensation. The sole question for determination, therefore, is whether the owner of the car Mr. Zaheer is liable to pay the compensation. The vicarious liability of the owner of the car for the negligent act of his employee has been the subject of decisions of Courts of this Country as well as in England. Counsel for both sides have cited a number of these decisions. It is not necessary to examine these decisions in view of the fact that the law on the point has been laid down by the Supreme Court in the case of Sitaram Motilal Kalal v. Santanuprasad Jai Shankar Bhatt and others, 1996 ACJ 89. The facts of this case were that the owner of the car had entrusted it to another person for being plied as a taxi, placing the taxi entirely in the charge of the said person. That person gave the taxi to a third person who was engaged by him as a cleaner for the purpose of taking a driving test to obtain a driver's licence. While taking the test the cleaner knocked down and injured a person. It was held that under the circumstances, the owner was not liable to pay compensation to the legal representatives of the deceased. Although the facts of that case are in some respects different from the facts of the present case, the principles enunciated by the Supreme Court would be applicable to the present case also. After referring to the several English cases on the subject, Hidayatullah, J,, (as his Lordship then was), who delivered the majority judgment of the Court made the following observations:

"The law is settled that a master is vicariously liable for the acts of his servants acting in the course of his employment. Unless the act is done in the course of employment, the servant's act does not make the employer liable. In other words, for the master's liability to arise, the act must be a wrongful act authorised by the master or a wrongful and unauthorised mode of doing some act authorised by the master. The driver of a car taking the car on the master's business makes him vicariously liable if he commits an accident. 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."

His Lordship also quoted with approval the following passage of Sri John Salmond (18thEdn.p.l24):

"A master is not responsible for the negligence or other 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."

The rule laid down by Cockburn CJ in the case of Storey v. Ashton, (1868-69) 4 QBD 476, was also approved as laying down the true rule in such cases. In that case, the defendant, a wine merchant, sent his cartman and clerk with a horse and cart to deliver some wine and bring back some empty bottles; on their return when about a quarter of a mile from the defendant's offices the cartman, instead of performing his duty, and driving to the defendant's offices, depositing the bottles, and taking the horse and cart to stables in the neighbourhood, was induced by the clerk (it being after business hours) to drive in quite another direction on business of the clerk and while they were thus driving, the plaintiff was run over, owing to the negligence of the cartman. It was held that the defendant was not liable; for that the cartman was not doing the act, in doling which he had been guilty of negligence, in the course of his employment as servant." (Para 4)

10. The Counsel for the claimants Sri Tutsi Reddy contended that Exs.B1 and B2 were brought into existence only to escape the liability by the appellant/owner. The driver who was dismissed from service for his unauthorised action immediately after the incident. But curiously nearly after 2 years 5 months, he appeared in the Court and gave evidence to support the claim of the appellant/owner, itself shows that the theory put forward by them in counter is only to wriggle out from the possible liability. The driver who was examined as RW3, in his cross-examination stated that Exs.B1 and B2 were served on him at the time when he joined the service in 1982. As already noted Ex.B1 is dated 19-4-1986. On careful comparison of the signature of RW3 in the deposition as well as Exs.B1 and B2 I have no hesitation to hold that the signature in Exs.B1 and B2 is not that of RW3 as the same is not tallying with the signature in the deposition. RW2 stated that the written orders were issued which contained the signatures of the driver Darshan Singh. Whereas RW3 Darshan Singh stated that Exs-B1 and B2 were issued to him. It is no where stated by RW2 that Exs.B1 and B2 are the office copies acknowledging the receipt of Exs.B1 and B2 by RW3. Once instructions are issued to RW3, how Exs.B1 and B2 were produced and from whose custody is not stated by RW2. In view of the same, I have no hesitation to hold that Exs.B1 and B2 were pressed into service to escape the liability.

11. Sri Tulsi Reddy relied on a decision reported in State of Maharashtra v. Kanchanmala Vijaysing Shirke, , to show that the driver in the course of his employment though" overstepped the authorisation and due to which third party suffered injuries, the employer is vicariously liable to the loss done by its employee.

12. In view of the above contention, the question that arises for consideration is whether RW3 was acting on behalf of the first respondent and over-stepped the authorisation by allowing the passengers to board the vehicle?

13. The Hon'ble Supreme Court in Shohan lal Passi v. P. Sesh Reddy, , held:

"In that connection reference can be made to the cases of London County Council v. Cattermoles (Garages) Lid, 1953 (2) All ER 582; Ilkiw v. Samuels, 1963 (2) All ER 879; Staveley Iron and Chemical Co. Ltd v. Jones, 1956 (1) All ER 403 and the case of Pushpabai Purushottam Udeshi v. Ranjit Ginning and Pressing Co. (P) Ltd., . The crucial test is whether the initial act of

the employee was expressly authorised and lawful. Then the employer shall nevertheless be responsible for the manner in which the employees that is, the driver and respondent 4 executed the authority. This is necessary to ensure so that the injured third parties who are not directly involved or concerned with the nature of authority vested by the master to his servant are not deprived from getting compensation. If the dispute revolves around the mode or manner of execution of the authority of the master by the servant, the master cannot escape the liability so far third parties are concerned on the ground that he had not actually authorised the particular manner in which the act was done. This aspect of the matter has been recently examined by a Bench of this Court of which one of us (N.P. Singh, J.,) was a member, in the case of State of Maharashtra v. Kanchanmala Vijaysingh Shirke, 1995 (5) SC 656. From the fact of that case it shall appear that the jeep which caused the accident belonged to the State of Maharashtra, the appellant in that case. The regular driver of the jeep allowed respondent 4 of that appeal who was a clerk in the Department of the State Government to drive the jeep when the accident took place. The High Court in that case recorded a finding that respondent No.4 of that appeal, was driving the jeep while on official duty. This Court held that a master is liable even for acts which he had not authorised provided they are so connected with the acts which he had authorised. If the act of the servant on the other hand is not even remotely connected within the scope of employment and is an independent act, the master shall not be responsible because the servant is not acting in the course of his employment but has gone outside."

14. His Lordship Justice B.P. Jeevan Reddy, (as he then was) speaking for the Division Bench of this Court in Moturi Krishna Rao's case (supra) held as follows:

"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'....." (Para 10)

15. It is admitted by the appellant/ owner in its counter that the driver was proceeding from Nizamabad to Kamareddy side in the lorry and he is permitted to drive the vehicle for the business of R1. In view of this admission, it can be concluded that the driver while working for the business of appellant/owner and during the course of employment on the way over-stepped the authority and allowed the passengers to board the vehicle.

16. Sri S. V.R. Somajayulu, learned Counsel appearing for the appellant/owner placed much reliance on Exs.B1 and B2 and contended that they were issued to the driver directing him not to allow passengers in the vehicle. No evidence was produced to substantiate that RW3 was dismissed from service for his negligent act, and an explanation is called for from him before dismissal. But surprisingly RW3 came and deposed in favour of the appellant/owner of the vehicle without taking summons through Court. There is no manner of doubt that Exs.B1 and B2 were pressed into service only to wriggle out from the liability of R1. Even otherwise if the said circulars were issued by the appellant/owner of the lorry still the appellant/owner cannot escape the liability for the reason the appellant/ owner authorised the driver to drive the lorry for Company's business on the relevant date. If the driver over-stepped the authority while in the course of his employment, the owner cannot escape the liability for the wrongful act of his servant insofar as third parties/unauthorised passengers are concerned, on the ground that the appellant/owner had not actually authorised the particular act in the manner in which it was done. Therefore, I am of the opinion that the appellant/owner of the vehicle is liable to compensate the wrongful actions done by its driver during the course of employment.

17. It is next contended by Sri S.V.R. Somayajulu that as the policy is in force, the Insurance Company/R2 is liable to pay compensation jointly and severally and Insurance Company cannot file appeals to exonerate them from the liability. In support of his contention, he relied upon a judgment of the Supreme Court in Amrit Lal Sood v. Kaushalya Devi Thapar, . Sri S. Hanmaiah, learned

Counsel appearing for the appellant/Insurance Company contended that in the facts and circumstances of the case cited Amrit Lal Sood v. Kaushalya Devi Thapar (supra) are not applicable to the facts of this case as admittedly the vehicle involved in the present case is a goods vehicle. Unless the policy covers the liability and extra premium is paid, the Insurance Company is not liable to pay or indemnify the owner and in support of his contention, he relied upon a recent judgment of the Supreme Court in Mallawwa v. Oriental Insurance Company Limited, .

18. In Amrit Lal Sood's case (supra) car was insured under comprehensive policy and a gratuitous passenger who is travelling in the said car claimed compensation. The Hon'ble Supreme Court held that in view of the comprehensive policy, the claim of gratuitous passenger for compensation for the injuries sustained by him in an accident of motor vehicle covered by comprehensive policy, the Supreme Court said that the Insurance Company is liable to meet the claim of the claimant and satisfy the award passed by the Tribunal. In the present case as it is a goods vehicle, the facts of the above case are not applicable to the facts of this case.

19. The policy Ex.B3 does not cover use for carrying passengers in the vehicle except employees (other than driver) not exceeding six in numbers coming under the purview of the WC Act, 1923. In view of the said express prohibition, the finding of the Tribunal that Ex.B3 does not contain any prohibition of passengers is not correct. In view of the law laid down by the Supreme Court, the contention of Sri Somayajulu that the Insurance Company is also liable to answer the claim is devoid of merits and cannot be accepted.

20. The Hon'ble Supreme Court in Mallawwa's case (supra) categorically held that the persons travelling in goods vehicle whether owners of the goods or passengers on payment of fare or gratuitous passenger who died in accident met with by such goods vehicle are not covered by proviso (ii) of Section 95(1)(b)(i) of the MV Act.

21. Sri Tulsi Reddy fairly conceded that in view of the settled law, the appeals filed by the Insurance Company have to be allowed.

22. In view of the aforesaid reasons, the appeals filed by the owner i.e., CMA Nos.269, 380, 382, 377, 379, 384 and 383 of 1994, are dismissed and the appeals filed by the Insurance Company i.e., CMA Nos.1662/93, 1711/93, 1731/93, 1730/93, 11/94 and 1733/93 are allowed exonerating the Insurance Company of its liability to pay compensation to the claimant/claimants, and the Insurance Company is not liable to indemnify the owner of the lorry. No costs.