Depot Manatger Madhya Pradesh State vs Smt.Sudha Bhadoriya on 18 December, 2025

Author: Hirdesh

Bench: Hirdesh

NEUTRAL CITATION NO. 2025:MPHC-GWL:33556

1 MA-976-2007
IN THE HIGH COURT OF MADHYA PRADESH
AT GWALIOR
BEFORE
HON'BLE SHRI JUSTICE HIRDESH
ON THE 18 th OF DECEMBER, 2025
MISC. APPEAL No. 976 of 2007
DEPOT MANATGER MADHYA PRADESH STATE
Versus
SMT.SUDHA BHADORIYA AND OTHERS
Appearance:
Shri S.S.Bansal - Advocate for the appellant.
Shri B.K.Agrawal- Advocate for respondent No.8.

Shri R.P.Gupta- Advocate for respondent Nos.1 to 3.
WITH
MISC. APPEAL No. 23 of 2008
SMT.SUDHA BHADOURIA AND OTHERS
Versus
NARESH SINGH AND OTHERS
Appearance:
Shri R.P.Gupta- Advocate for appellants.
Shri S.S.Bansal - Advocate for respondent No.4

Shri B.K.Agarwal - Advocate for respondent No.3.

ORDER

These misc. appeals u/S. 173 (1) of the Motor Vehicles Act, 1988 arise out of a

common Award dated 20.07.2007 passed by 7th Motor Accident Claims Tribunal, Fast Track, Gohad, District Bhind, (hereinafter it would be referred as "the Claims Tribunal") in Claim Case No. 09/2006.

2. Since both the misc. appeals challenge the same award, therefore, they were heard analogously and are being decided by this common judgment.

3. MA No. 976/2007 has been preferred by the Madhya Pradesh State Road

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2 MA-976-2007 Transport Corporation, Gwalior (in short "MPSRTC") through its Depot Manager, assailing the findings of the Claims Tribunal whereby a liberty was granted to the Insurance Company to recover the compensation amount from the (MPSRTC) whereas MA No.23/2008 has been preferred by the claimants seeking enhancement of compensation whereby as per the findings of the Claims Tribunal, in the alleged motor accident, the Claims Tribunal awarded only compensation to the tune of Rs.7,18,676/- in favour of the claimants along with interest from the date of filing of the claim petition till its realization.

4. Shri Bansal, learned counsel appearing for MPSRTC submits that the Claims Tribunal has committed a manifest error in holding the MPSRTC liable for payment of compensation and granting recovery rights to the Insurance Company against MPSRTC. It is submitted that Naresh Singh (respondent No.1 therein)

was the registered owner of the bus (hereinafter it would be referred as "offending vehicle") and the offending vehicle was duly insured with Insurance Company at the time of the alleged accident. It is further submitted that an Agreement was executed between the MPSRTC and Naresh Singh, wherein it was categorically stipulated that the registered owner - Naresh Singh shall be solely responsible for any liability arising out of alleged accident. The Claims Tribunal, without properly appreciating the terms & conditions of the Agreement and the settled position of law, has erroneously fastened the liability upon the MPSRTC merely on the ground that the offending vehicle was being operated under its control and supervision. Hence, the impugned Award to that extent is illegal, arbitrary, and liable to be set aside.

5. Shri B.K.Agarwal- learned counsel appearing for the Insurance Company on the other hand opposed the contentions of MPSRTC by filing a cross-objection under Order 41 Rule 22 of the CPC (IA No.17936/2007) and contended that the

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3 MA-976-2007 Claims Tribunal erred in exonerating Naresh Singh, the registered owner of the offending vehicle. It is submitted that since Naresh Singh was the registered owner, he is statutorily liable to pay compensation and therefore, the cross- objection of the Insurance Company be considered.

6. Shri R.P. Gupta - learned counsel appearing for the claimants submitted that the Claims Tribunal awarded compensation is on the lower side and also committed grave errors in assessment. It is contended that the Claims Tribunal has wrongly deducted GPF of Rs. 1,200/- and GIC of Rs. 200/- from the salary of the deceased- Jai Singh Bhadoriya while computing the income for assessment of compensation. It is submitted that the correct net monthly income of the deceased was Rs. 6,818 + Rs. 1,200 + Rs. 200 = Rs. 8,218/-. Further, the Claims Tribunal failed to add appropriate future prospects and did not award just and proper compensation under the other conventional heads including loss of consortium, loss of estate, and funeral expenses. Accordingly, the compensation awarded to the claimants by the Claims Tribunal be enhanced.

7. Learned counsel appearing for the MPSRTC as well as learned counsel appearing for the Insurance Company submits that no interference is called for enhancement of compensation amount and prayed for dismissal of appeal filed by the claimants.

8. Heard learned counsel for the parties and perused the record of the Claims Tribunal.

9. On perusal of the record of the Claims Tribunal, in the present case, it is not in dispute that Naresh Singh was the registered owner of the offending vehicle. An agreement was executed between the MPSRTC and Naresh Singh, in which it

was clearly mentioned that the registered owner will be responsible for payment of compensation, in case of any accident. It is also undisputed fact that the offending

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4 MA-976-2007

vehicle-in-question was insured with the Insurance Company at the time of alleged accident.

10. The main questions arises before this Court is whether the Claims Tribunal has committed an error in exonerating Naresh Singh/registered owner - from his liability to pay compensation and the Claims Tribunal has further erred in granting the recovery rights to the Insurance Company against the MPSRTC ?

11. On perusal of the record, it is clear that the offending vehicle was hired by the MPSRTC under an Agreement, but ownership of the offending vehicle continued to vest with Naresh Singh/registered owner at all relevant times. The Agreement specifically fastens liability upon the registered owner in case of any accident.

12. It is a settled principle of law that for the purpose of compensation under the Motor Vehicles Act, the primary liability lies upon the registered owner of the vehicle, subject to the terms and conditions of the insurance policy. Mere operation or control of the vehicle under a hiring arrangement, does not shift statutory liability from the registered owner to the hirer.

13. In the present case, the Claims Tribunal has committed an error in exonerating Naresh Singh, the registered owner and in fastening liability upon the MPSRTC. Consequently, the grant of recovery rights to the Insurance Company against the MPSRTC is unsustainable in law.

14. In view of the above discussion, this Court is of the considered opinion that the appeal filed by the MPSRTC deserves to be allowed and the liability requires to be re-fixed in accordance with law.

15. The definition of "owner" in Section 2(19) of the Motor Vehicles Act (as it then stood), as follows:

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5 MA-976-2007 "17. The definition of owner under Section 2(19) of the Act is not exhaustive. It has, therefore, to be construed, in a wider sense, in the facts and circumstances of a given case. The expression owner must include, in a given case, the person who has the actual possession and control of the vehicle and under whose directions and commands the driver is obliged to operate the bus. To confine the meaning of "owner" to the registered owner only would in a case where the vehicle is in the actual possession and control of the hirer not be proper for the purpose of fastening of liability in case of an accident. The liability of the "owner" is vicarious for the tort committed by its employee during the course of his employment and it would be a question of fact in each case as to on whom can vicarious liability be fastened in the case of an accident. . . ." (emphasis in original)

16. In a subsequent judgment, viz., Uttar Pradesh State Road Transport Corporation v. Kulsum and Ors. (2011) 8 SCC 142 ["Kulsum"], this Court stated the question of law that arose for consideration as follows:

"3. The question of law that arises for consideration in the instant and connected appeals is formulated as under: if an insured vehicle (in this case a mini bus) is plying under an agreement of contract with the Corporation, on the route as per permit granted in favour of the Corporation, in case of an accident, whether the Insurance Company would be liable to pay compensation or would it be the responsibility of the Corporation or the owner?"

17. It then referred to the definition of "owner" under Section 2(30) 1 of the Motor Vehicles Act, 1988 and contrasted it with the definition of "owner" in Section 2(19)2 of the 1939 Act.

It then went on to distinguish Kailash Nath Kothari(supra) as follows:

"16. In Kailash Nath Kothari [Rajasthan State Road Transport Corporation v. Kailash Nath Kothari (1997) 7 SCC 481], a question had arisen with regard to the liability of the insurance company, where the bus plied as per the contract with Rajasthan State Road Transport Corporation. However, the said case was dealing with the earlier Motor Vehicles Act of 1939. Taking into consideration the definition of "owner" as it existed then in Section 2(19) of the old Act, it has been held in para 17 as 1 "2(30) 'owner' means a person in whose name a motor vehicle stands registered, and where such person is a minor, the guardian of such minor, and in relation to a motor vehicle which is the subject of a hire-purchase agreement, or an agreement of lease or an agreement of hypothecation, the person in possession of the vehicle under that agreement;" 2 "2(19) 'owner' means, where the person in possession of a motor vehicle is a minor, the guardian of such minor, and in relation to a motor vehicle which is the subject of a hire-purchase agreement, the person in possession of the vehicle under that agreement;" CIVIL APPEAL NO. 2526 OF 2020 under: (SCC pp.487-88)

"17. The definition of 'owner' under Section 2(19) of the Act is not exhaustive. It has,

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6 MA-976-2007 therefore to be construed, in a wider sense, in the facts and circumstances of a given case. The expression 'owner' must include, in a given case, the person who has the actual possession and control of the vehicle and under whose directions and commands the driver is obliged to operate the bus.

To confine the meaning of 'owner' to the registered owner only would in a case where the vehicle is in the actual possession and control of the hirer not be proper for the purpose of fastening of liability in case of an accident. The liability of the 'owner' is vicarious for the tort committed by its employee during the course of his employment and it would be a question of fact in each case as to on whom can vicarious liability be fastened in the case of an accident. In this case, Shri Sanjay Kumar, the owner of the bus could not ply the bus on the particular route for which he had no permit and he in fact was not plying the bus on that route. The services of the driver were transferred along with complete 'control' to RSRTC, under whose directions, instructions and command the driver was to ply or not to ply the ill-fated bus on the fateful day. The passengers were being carried by RSRTC on receiving fare from them. Shri Sanjay Kumar was therefore not concerned with the passengers travelling in that bus on the particular route on payment of fare to RSRTC. Driver of the bus, even though an employee of the owner, was at the relevant time performing his duties under the order and command of the conductor of RSRTC for operation of the bus. So far as the passengers of the ill-fated bus are concerned, their privity of contract was only with the RSRTC to whom they had paid the fare for travelling in that bus and their safety therefore became the responsibility of the RSRTC while travelling in the bus. They had no privity of contract with Shri CIVIL APPEAL NO. 2526 OF 2020 Sanjay Kumar, the owner of the bus at all. Had it been a case only of transfer of services of the driver and not of transfer of control of the driver from the owner to RSRTC, the matter may have been somewhat different. But on facts in this case and in view of Conditions 4 to 7 of the agreement (supra), the RSRTC must be held to be vicariously liable for the tort committed by the driver while plying the bus under contract of the RSRTC. The general proposition of law and the presumption arising therefrom that an employer, that is, the person who has the right to hire and fire the employee, is generally responsible vicariously for the tort committed by the employee concerned during the course of his employment and within the scope of his authority, is a rebuttable presumption." (emphasis in original) xxx xxx xxx

"18. In our considered opinion, in the light of the drastic and distinct changes incorporated in the definition of "owner" in the old Act and the present Act, Kailash Nath's case [Rajasthan State Road Transport Corporation v. Kailash Nath Kothari (1997) 7 SCC 481] has no application to the facts of this case. We were unable to persuade ourselves with the specific question which arose in this and connected appeals as the question projected in these appeals was neither directly nor substantially in issue, in Kailash Nath's case [Rajasthan State Road Transport Corporation v. Kailash Nath Kothari (1997) 7 SCC 481]. Thus, reference to the same may not be of much help to us. Admittedly, in the said case, this Court was dealing with regard to earlier definition of "owner" as found in Section 2(19) of the old Act.

" Finally, the insurance company was held liable stating:

"29. In the instant case, the driver was employed by Ajay Vishen, the owner of the bus but evidently through Clause 4.4 CIVIL APPEAL NO. 2526 OF 2020 of the agreement, reproduced hereinabove, driver was supposed to drive the bus under the instructions of the conductor who was appointed by the Corporation. The said driver

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7 MA-976-2007 was also bound by all orders of the Corporation. Thus, it can safely be inferred that effective control and command of the bus was that of the appellant.

30. Thus, for all practical purposes, for the relevant period, the Corporation had become the owner of the vehicle for the specific period. If the Corporation had become the owner even for the specific period and the vehicle having been insured at the instance of original owner, it will be deemed that the vehicle was transferred along with the insurance policy in existence to the Corporation and thus the Insurance Company would not be able to escape its liability to pay the amount of compensation.

31. The liability to pay compensation is based on a statutory provision. Compulsory insurance of the vehicle is meant for the benefit of the third parties. The liability of the owner to have compulsory insurance is only in regard to third party and not to the property. Once the vehicle is insured, the owner as well as any other person can use the vehicle with the consent of the owner.

18. The law laid down in Kulsum's case (supra) squarely applies to the facts of the present case. Also, the argument based on Clause 10, which states as follows,

"CLAUSE 10: The second party (Bus owner) shall have full liability for any fault, negligence, accident, or other illegal acts of the driver and liability for payment of any compensation or other dues whatsoever in this regard shall be that of the owner of the bus or Insurance Company under the Acts. In no case, the First party (Petitioner Corporation) shall have any liability for fault, negligence, accident, or other illegal acts of the driver.

In case any payment is made by the First Party in compliance of any order of any Court, etc., the First Party shall be authorized to recover the same." is only between the Corporation and the bus owner and does not bind anybody who is not privy to the aforesaid agreement, least of all, the victim.

19. Accordingly, Miscellaneous Appeal No. 976/2007 filed by the M.P.S.R.T.C. is allowed. The M.P.S.R.T.C. is exonerated from its liability to pay the compensation amount. The Insurance Company shall be liable to pay the compensation to the claimants jointly and severally along with the owner and driver of the offending vehicle because there is no breach of the policy. Firstly, the liability to pay compensation shall be upon the Insurance Company.

20. So far as the Misc. Appeal filed by the claimants for enhancement of

compensation amount is concerned, upon examination of the record of the Claims

Tribunal as well as the impugned Award, it is found that the alleged accident

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8 MA-976-2007 occurred on 02.10.2005 and the Claims Tribunal has erred in assessing the income of the deceased. The Claims Tribunal has wrongly deducted GPF & GIC from the net salary of the deceased. So, in considered opinion of this Court, the net salary of the deceased ought to have Rs.6818+1200+200= Rs.8218/- per month.

2 1 . With regard to loss of income including future prospects, in view of the judgment of the Supreme Court in the case of National Insurance Co. Ltd. Vs. Pranay Sethi, 2017 ACJ 2700, the claimants are entitled to addition towards future prospects. Accordingly, 30% is required to be added. Further, as per the decision of Hon'ble Supreme Court in the case of Sarla Verma & Ors. Vs. Delhi Transport Corporation & Anr., (2009) 6 SCC 121, considering the age of the deceased, the Claims Tribunal has rightly applied multiplier of 13. Accordingly, the claimants are entitled to compensation under the following heads:

                                               Heads                             Amount (Rs.)
                                                                      Rs.8,343 - Rs. 125 (professional tax)
                                 Monthly Income
                                                                     = Rs. 8218/- per month
                                 Annual Income (8218× 12)            Rs.98,616/-
                                 After adding 30% Future Prospects Rs. 1,28,201/-
                                 Dependency (3/4)                    Rs.96,151/-
                                 Multiplier (13)                     Rs.12,49,963/-
                                 Other heads:-
                                 Loss of Consortium                  Rs.40,000/- x 3= 1,20,000/-
                                 Loss of Estate and funeral expenses Rs.30,000/-
                                 Total Compensation                  Rs. 13,99,963/-

22. Thus, the just and proper amount of compensation in the instant case is Rs.13,99,963/- as against the Award of the Claims Tribunal of Rs.7,18,676/-. Accordingly, the appellants/claimants are entitled to an additional sum of Rs.6,81,287/- over and above the amount, which has been awarded by the Claims Tribunal.

23. In the result, MA No. 23/2008 filed by the claimants is partly allowed,

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9 MA-976-2007 by enhancing the compensation amount by a sum of Rs.6,81,287/-. The enhanced amount shall carry interest as fixed by the learned Claims Tribunal from the date of filing of claim petition till its realization. The said amount be paid within a period of three months from the date of receipt of certified copy of this order. Rest of conditions as imposed by learned Claims Tribunal shall remain intact.