GURU GOVEKARversusMISS FILOMENA F. LOBO & ORS.

A                          GURU GOVEKAR
                                 v.
                    MISS FILOMENA F. LOBO & ORS.

                                  MAY 6, 1988
B
               [E.S. VENKATARAMIAH AND N.D. OJHA, JJ.]

          Motor Vehicles Act, 1939-Whether an insurer who has issued an
    insurance policy in respect of a person against a liability which may be
    incurred in respect of death of or bodily injury to any person or damage
    to any property of a third party arising out of use of a motor vehicle in a
C   public place, is liable to pay compensation when liability arises when
    motor vehicle is in the custody of a repairer.

          A car owned by a firm was entrusted to Guru, proprietor of M/s
    Auto Electrical Works, for electrical repairs. The car was insured with
D   M/s. Oriental Insurance Co. Ltd. as required under the Motor Vehicles
    Act, 1939 '('The Act'). When Momad Donttach an employee of the
    repairer, was repairing the car, the respondent No. 1 was knocked
    down when the car dashed against the said respondent as a result
    whereof she bad to be hospitalised and treated for injuries. The respon-
    dent No. l instituted a claim petition under section 1111-A of the Act
E   before the Motor Accidents Claims Tribunal, impleading ttie firm-the
    owner of the car-Guru, the repairer, Momad Douttach, the mechanic,
    and the insurer-M/s. Oriental Insurance Co. Ltd.-as respondents. The
    respondents contested the petition.

          The Tribunal passed its award, allowing a compensation of
F   Rs.90,000 to the respondent No. 1 for the injuries snffered by her,
    payable jointly and severaUy by the insurer and all the other respon-
    dents. Aggrieved by the decision of the Tribunal, the insurer and Guru
    filed appeals before the High Court, which allowed the appeal of the
    insurer, however, holding that under section 92 A of the Act, the in-
    snrer was liable to pay to the extent of Rs. 7,500. Guru's appeal was
G   dismissed, holding that he and his mechanic Momad Donttach alone
    were jointly and severally liable to pay the compensation, i.e. the entire
    sum awarded minus Rs. 7 ,500 above said. Aggrieved by the decision of
    the High Conrt. Gnru moved this Conrt for relief by special leave.

         Allowing the appeal and modifying the order of the High Court,
H   the Court,


                                       170
                      GURU GOVEKAR v. F. LOBO                          171

      HELD: The only question of law arising for consideration
                                                                           A
was whether the insurer was liable to pay the compensation to the
claimant, which has to be resolved in the light of the provisions of the ·
Act. [I 75 B, C]

      If a policy is taken in respect of a motor vehicle from an insurer in
compliance with the requirements of Chapter VIII of the Act, the              B
insurer is under an obligation to pay the compensation payable to a
third party on account of any injury to his/her person, property or to a
legal representative of the third party in case of death of the third party
caused by use of the vehicle at a public place. The liability to pay the
said compensation arises when the insured is using the vehicle in a
public place. It also arises when the insured has caused or allowed
any other person (including an independent contractor) to use his             c
vehicle in a public place and the death of or injury to the person or
property of a third party is caused on account of the use of the said
vehicle during such period, unless such other person has himself taken
out a policy of insurance to cover the liability arising out of such an
accident. [I76E-G]                                                            D

       Io this case, neither Guru Govekar, the repairer, nor his
mechanic Momad Donttach had taken a policy of insurance covering
the liability to pay compensation payable to a third party, when a motor
vehicle taken for repairs from its owner has caused the death of or
injury to a third party. When the owner of a motor vehicle entrusts his       E
vehicle to a repairer to carry out repairs, he is allowing the repairer to
use his vehicle in that connection. It is also implicit in the said trans-
action that unless there is any contract to the contrary, the owner of the
vehicle also causes or allows any servant of the repairer, engaged in the
work of repairs to use the vehicle in connection with the work of repairs
and when such work of repair is being carried out in a public place, if       F
on account of the negligence of either the repllirer or his employee
engaged in the repair work, a third party dies or suffers injury to his
person or property, the insurer becomes liable .to pay the compensation
under the provisions of the Act. While it may be true that under the
Law of Torts, the owner may not_ be liable on the principle of vicarious
liability, the insurer would be liable to pay the compensation by virtue      G
of the provisions of sections 94 and 95 of the Act. On the facts of the
case, the insurer was liable to pay the compensation found due to the
claimant as a consequence of the injuries suffered by her due to the
negligence of the mechanic engaged by the repairer who had under-
taken to repair the vehicle, by virtue of the provisions contained in
section 94 of the Act. Any other view will expose the innocent third          H
    172        SUP-REME COURT REPORTS               [1988] Supp. 1 S.C.R.

A .parties to go without compensation when they suffer injuries on account
  ,of such motor accidents and will defeat the very object of introducing
   the necessity for taking out insurance policy under the Act. l176H;
   177A-C; 180F; ISIF]
        The Court allowed the appeal, modified the order of the High
  .Court and directed the insurer to pay to the claimant the sum of
B Rs.90,000, etc. [!SIG]

          Monk v. Warbey and others, [1935] 1 K.B. 75; McLeod (or               II
    Houston) v. Buchanan, [1940] 2 All E.R. 179; Vijaynagaram
    Narasimha Rao and others v. Chanashyam Das Tapadia and others,
    [1986] A.C.J. 850; Shantibai and others v. The Principal Govindram
C   Sakseria Technological Institute, Indore and Others, [1972] ACJ 354; D.
    Rajapathi v. University of Madurai and Others, [1980] ACJ 113; New
    Asiatic Insurance Co. Ltd. v. Pessumal Dhanamal Aswani and Ors.,
    [~964] SCR 867, referred to.

         CIVIL APPELLATE JURISDICTION: Civil Appeal Nos.
D   1684-85 of 1988.

        ·From the Judgment and order dated 27.8.1987 of the Bombay High
    Court in First Appeal No. 48 and 74 of 1986

          K.J. John and San jay Grover for the Appellant.
E
         S.K. Mehta, M.K. Dua, S.M. Sarin, Aman Vachher, R.J.
    Goulay, Mrs. S.C. Dhanda and H.K. Puri for the Respondents.

          The Judgment of the Court '-':as delivered by

p         VENKATARAMIAH, J. The short question involved in this case
    is whether an insurer who has issued a policy insuring any person
    specified in the policy against any liability which may be incurred by
    him in 'respect of the death of or bodily injury to any person or damage
    to any property of a third party caused by or arising out of the use of a
    motor vehicle in a public place, is liable to pay compensation to such
G   third party or to his or her legal representatives as the case may be
    when the liability arises when the motor vehicle is in the custody of a
    repairer.

       One Sayed Hussain was a partner of a firm by name M/s. Inter-
  national Ship Repairers carrying on business at Vasco-da-Gama, Goa
H which was the owner of an Ambassador car. He entrusted the said car
               GURU GOVEKAR v. F. LOBO !VENKATARAMIAH, J.]                 173

     to Guru, proprietor of M/>. Auto Electrical Works on 26th February,
                                                                                 A
     ·1983 with instructions to carry out electrical repairs to the car and
     handed over the keys of the car to the repairer for that purpose. The
     car had been. insured by the owner with M/s. Oriental Insurance Co.
     Ltd. as required by the provisions of the Motor Vehicles Act, 1939
     (hereinafter referred to as 'the Act').
                                                                                 B
            Qn the evening of February 26, 1983 Filomena F. Lobo, respon-
     dent No. 1 herein, aged 27 _years was returning home along with her
     friend and was walking on the left side of the road. She noticed a car
     parked near Damodar Mandap and proceeded further only to be
     knocked down by the very car which had reversed and dashed against
     her back. The front tyre of the car passed over her abdomen and she
     had to be treated at Dr. Vemekar's hospital and thereafter at Salga- c
     oncar's Medical Research Centre. After being discharged from the
     hospital where she spent about 20 days she was advised further treat-
     ment at Jaslok Hospital, Bombay and she was undergoing treatment
     even when she instituted a Claim petition before the Motor Accidents
     Claims Tribunal, South Goa at Margao impleading the firm of which D
     Sayed Hussain was a partner, Guru, the proprietor of M/s. Auto
     Electrical Works, Momad Donttach, the employee of the repair~r,
     who was repairing the car at the time of the accident and the insurer
     Mis. Oriental Insurance Co. Ltd. as respondents. She filed the Claim
     Petition under section 110-A ·of the Act claiming a compensation of
     Rs.1,00,000 for injuries sustained by her on account of the motor E
     vehicle accident referred to above. The respondents contested the
     petition. The owner of the car, that is the insured and M/s. Oriental
     Insurance Co. Ltd. the insurer pleaded that the car had been entrusted
     to the repairer to do electrical repairs job as an independent contractor
     and that Momad Donttach attached to the garage of the repairer had
     taken away the car for driving without holding a valid driving licence F
     and without the consent of the owner of the motor. vehicle owner.
     Hence neither the insurer that is the insurance company, nor the
     insured, that is, the owner of the vehicle, was liable to pay any com-
     pensation. Momad Donttach the employee of the repairer pleaded
     that he did not drive the vehicle involved in the accident at any time,
     that the vehicle had been entrusted to carry out repairs to Guru, the G
     repairer, that he being a mechanic was carrying out· the repairs by
     sitting on the. front seat, i.e., the seat other than that of the driver, that
••   suddenly the vehicle got into motion and started going in the reverse
     direction and that before he could take the driver's seat and apply ihe
     brakes the vehicle got into the ditch and stopped. He further con-
     tended that the applicant was guilty of contributory negligence in as H


                                               >'·
    174         SUPREME COURT REPORTS                I 1988] Supp. 1 S.C.R.      ''
A much as she in exercise of due diligence ought not to have walked
  through the very little space between the vehicle and the wall. He,
  however, did not deny that she suffered injuries on account of one of
  the ~heels of the vehicle running over her body. Guru, the repairer            '
  pleaded that Mom ad Donttach was not his employee and he' had never
  engaged him for any work and that it was not true that he was driving
B the. vehicle when the said vehicle was allegedly given for electrical
  repairs. On the above pleadings the Tribunal framed among others the
  following issues:(i) Whether the applicant proved that the accident
  which caused injuries to the claimant on 26.2.83 at Vasco, was due to
  the rash and negligent driving on the part of the mechanic,;
  (ii) whether the applicant proved that the amount of compensation
  claimed was due, reasonable and adequate; and (iii) whether the
C owner of the vehicle and the insurer proved that the mechanic had
  driven the car without holding a valid licence and without the consent
  of the owner. The Tribunal on a consideration of the oral and
  documentary evidence placed before it found that the claimant had
  suffered injuries on 26.2.1983 on account of the rash and negligent.
D handling of the motor vehicle by Momad Donttach; that the claimant
  was not guilty of any contributory negligence; that she was entitled to a
  compensation of Rs.90,000 for the injuries suffered by her; that
  Momad Donttach had a valid driving.licence; that the car had been
                                                                                  II
   entrusted by the owner to Guru, the repairer for carrying out repairs;
   Momad Donttach was an employee of Guru; that the accident had
E taken place when the repairs were being effected to the car; and that
   the insurer and all other respondents were liable to pay the compensa-
   tion of Rs.90,000 jointly and severally with interest thereon at six per
   cent per annum from the date of the claim till its complete satisfaction.
   The Tribunal passed its award accordingly.

F          Aggrieved by the decision of the Tribunal the insurer M/s.
    Oriental Insurance Co. Ltd. and Guru to whom the car had been                 (
    entrusted for carrying out the repairs filed appeals before the High
    Court of Bombay Panaji Bench. The High Court allowed the appeal
    filed by the insurer M/s. Oriental Insurance Co. Ltd. but however held
  -._that under section 92A of the Act the insurer was liable to the extent of
G Rs. 7 ,500 only. The appeal filed by Guru was dismissed holding that he
    and his mechanic Momad Donttach alone were jointly and severally
    liable to pay the compensation. The result of the judgment of the High
    Court was that the entire compensation minus Rs.7,500 which the
    insurer was asked to pay under section 92A of the Act had to be paid
    by Guru the repairer of the car and his mechanic Mom ad Donttach.
H Aggrieved by the decisi0n of the High Court Guru has filed the above
    appeals by special leave.
          GURU GOVEKAR v. F. LOBO [VENKATARAMIAH, J.[                 175

      There is no dispute that the insurer had issued a policy in respect
of the car; in question as provided in the Act; that the Claimant had        A
suffered injury on account of the negligence of the employee of the
repairer, the appellant herein; ·and that the car had been entrusted by
the owner to the repairer to carry out the repairs. The only question of
Jaw which arises for consideration in this case is whether the insurer is
liable to pay compensation to the claimant.                                  B

       Under the Law of Torts the owner of a motor vehicle is no doubt
not liable to pay compensation to any third party who suffers any
in jury on account of the negligence of the employee of an independent
contractor, who has taken the vehicle from the owner for his own
(independent contractor's) use. The question involved in this case has,
however, to be resolved in the light of the provisions of the Act. The·      c
material part of section 94( I) of the Act reads thus:

                  "94. Necessity for insurance against third party risk
            ( !) No person shall use except as a passenger or cause or
            allow any other person to use a motor vehicle in a public        D
            place, unless there is in force in relation to the use of the
            vehicle by that person or that other person, as the case may
            he, a policy of insurance complying with the requirements
            of this Chapter ... "

       The above provision requires every person, who uses a motor           E
vehicle in a public place, except as .a passenger, to take out a policy of
insurance complying with the requirements of Chapter VIII of the Act.
It also requires a person, who causes or allows any other person, to use
his motor vehicle in a public place to take out policy of insurance
complying with the requirements of Chapter VIII of the Act unless
there is in force a policy of insurance in relation to the use of the        F
vehicle by that other person, as required by Chapter VIII of the Act.
Section 95 of the Act contains the requirements of such-policies and
limits of liability. The relevant portion of section 95 of the Act reads
thus:

                   "95. Requirements of policies and limits of liability     G
            ( 1) In order to comply with the requirements of this Chap-
            ter, a policy of insurance must he a policy which-

                 (a) is issued by a person who is an authorised insurer
            or by a cooperative society allowed under section 108 to
            transact the business of an insurer, and                         H
    176          SUPREME COURT REPORTS                   [i988] Supp. 1 _S.C.R.

                       (b) insures the person or classes of persons specified
                 in the policy to the extent specified in sub-section (2)-

                        (i) against any liability which may be incurred by him
                 in respect of the death of or bodily in jury to any person or
                 damage to any property of a third party caused by or arising
                 out of the use of the vehicle in a public place .... "

                The portion of section 95 of the Act, extracted above, requires
        every person, who is the owner of a motor vehicle to take out a policy
       :against any liability which may be incurred by him in respect of the
       ·death of or injury to any person or damage to any property of a third
       :party ·caused by ·or arising out of the use of the vehicle in a public
C :place, from an authorised insurer or a cooperative society allowed
        unilet ·section 108 of 'the Act to transact the business of an insurer.
        Undet ·section 95(2)(c) of the Act in the case of motor vehicles other
       "faan 'those referred to in clauses (a) or (b) of section 95(2) the policy of
       -insurance should cover the amount of liability incurred. Under section
'}'.) 125 'of the Act whoever drives a motor vehicle or causes or allows a
        m:otot'vehide lo be driven in contravention of the provisions of section
       '94 'Of 'the Act shall be punishable with imprisonment which may extend
        to three months, or with fine which may extend to one thousand
        t'upees,. or with both. Thus if a policy is taken in respect of a motor
        vehicle from an insurer in compliance with the requirements of Chap-
1:; ter V:rii of the Act, the insurer is under an obligation to pay the
         compensation payable to a third party on account of any injury to
         his/bet person or 'property ·or payable to the legal representatives of
        the third party in ·case of death of the third party caused by or arising
       'out -of the lilse of the vehicle at a public place. The liability to pay
        e-ompe·nsation 'in ·respeet ·of death ·of or injury caused to the person or
 F properfy'O'f a third party undoubtedly arises when such injury is caused
        when the insu-red is using the vehicle in a public place. It also arises
         when ·the insurer ha:s caused or allowed any other person (including an
         indepeniletit contractor) to use his vehicle in a public place and the
        •dea'ih cl tOt injury 'to the person or property of a third party is caused
         on account ·Of lhe use of the said vehicle during such period, unless
@ such ·other person has himself taken out a policy of insurance to cover
      · 't'he liability:arisfng·out of such an accident.

            ln the instant case neither Guru Govekar., the repairer, nor his
   >mechanic Momad Oonttach had taken a ·policy ·of insurance covering
   the liability :to ·pay compensation payable to a third party, when a
N: l'i'l'Olot Vlihitle taken for repair from its owner has caused the death or
           GURU GOVEKAR v. F. LOBO [VENKATARAMIAH, J.]                   177

 injury to any third party giving rise to the liability to pay compensa-
                                                                                A
 tion. When the owner of a motor vehicle ·entrusts his vehicle to a
 repairer to carry out repairs he is in fact allowing the repairer to use his
 vehicle in that connection. It is also implicit in the said transaction that
 unless there is any cantract to the contrary the owner of the vehicle
 also :causes or allows any servant of the repairer who is engaged in the
 work of repairs to use the motor vehicle for the purpose of or in              B
 connection with the work of repairs and when such work of repair is
 being carried out in a public place if on account of the negligence of
 either the repairer or his employee, who is engaged in connection with
 the work of repair, a third party dies or. suffers any in jury either to his
 person or property, the insurer becomes liable to pay the compensa-
 tion under the provisions of the Act. In this context we may refer to
-the provisions of section 35(1) of the Road Traffic Act, 1930 which was        c
 in force in England, which at the relevant time read as follows:

                  '"35(1). Subject to the provisions of tbis Part of this
             Act, it shall not be lawful for any person to use, or to cause
             or permit any other person to use, a motor vehicle on a            D
             road unless there is in force in relation to the user of the
             vehicle by that person or that other person, as the case may
             be, such a policy of insurance or such a security in respect
             of third-party risks as complies with the requirements of
             this Part of this Act."
                                                                                E
       The above provision came up for consideration before the Eng-
 lish Court of Appeal in Monk v. Warbey and Others, [1935) 1 K.B. 75.
 In that case the plaintiff claimed damages for personal injuries sus-
 tained by him as the result of a collision between a motor coach driven
 by him and motor car belonging to the defendant, Warbey. The motor
 car had been lent by Warbey to the defendant Knowles on whose f
 behalf it was being driven at the material time by the defendant May,
 and, as the plaintiff alleged, being driven negligently. Warbey, the
 owner of the car, was insured against third party risks, but neither
Knowles nor May was insured against those risks. The plaintiff alleged
 that the defendant Warbey by permitting the car to be used by
 Knowles and May, when no policy of insurance was in force in relation G
 to such user, committed a breach of the duty imposed by section 35 of
the Road Traffic Act, 1930. The plaintiff further alleged that neither
 Knowles nor May was possessed of any means with which to pay any
sum in respect of the damage sustained by the plaintiff. The defendant
Warbey pleaded in the course of his defence (i) that the action against
.him 'Was based upon the alleged breach of a statutory duty and it was H
                                                                                   .   '



    178        SUPREME COURT REPORTS                [1988] Supp. 1 S.C.R.

  not such a breach as gave a cause of action to an injured member of the
A public; (ii) that in any event the damage was too remote in law; and
  (iii) that the action against the defendant Warbey was premature in
  that he could not be joined with Knowles and May until the rights, if
  any, against them had been exhausted. The trial Court rejected the
  defence of Warbey and made a decree against him for £70. Warbey
B appealed to the Court of Appeal. Greer, L.J. in the course of his
  judgment explained the object of enacting section 35 of the Road
  Traffic Act, 1930 and the basis of the liability of the owner of the
  vehicle at pages 80-81 thus:

                     "Consequently the Road Traffic Act, 1930, was pas-
               sed for the very purpose of making provision for third
c              parties who suffered in jury by the negligent driving of
               motor vehicles by uninsured persons to whom the insured
               owner had lent such vehicles. How could Parliament make
               provision for their protection from such risks if it did not
               enable an injured third person to recover for a breach of
D              s. 35? That section which is in Part II of the Act headed
               'Provision against third-party risks arising out of the use of
               motor vehicles', would indeed be no protection to a person
               injured by the negligence of an uninsured person to whom
               a car had been lent by the insured owner, if no civii remedy
               were available for a breach of the section. The Act requires
E              every person who runs a car to have an insurance on the use
               of the car, and to provide himself with a certificate stating
               the terms of the insurance. Section 35, sub-s. 1 says that
               'subject to the provisions of this Part of this Act, it shall not
               be lawful for any person to use, or to cause or permit any
               other person to use, a motor vehicle on a road unless there
F              is in force in relation to the user of the vehicle by that
               person or that other person, as the case may be, such a
               policy of insurance or such a security in respect of third-
               party risks as complies with the requirements of this Part of ·
               this Act.' There is no dispute that the appellant committed
               a breach of the section, but it is argued that taking the Act
G              as a whole it is clear that it was not intended to confer a
               right upon an injured third person to claim damages for
               such a breach. It seems to me that the situation is exactly
               within the language of A.L. Smith L.J. in Groves v. Lord
               Wimborne, [1898] 2 Q.B. 402 where he said at page 406:
                'The Act in question,' the Factory & Workshop Act, 1878
H              'which followed numerous other Acts in pari materia, is not
          GURU GOVEKAR v. F. LOBO [VENKATARAMIAH, J.]               179

             in the nature of a private legislative bargain between emp-
                                                                            A
             loyers and workmen, as the learned judge seemed to think,
             but is a public Act passed in favour of the workers in
             factories .and workshops to compel their employers to do
             certain things for their protection and benefit.' The Lord
             Justice then said at page 407: 'Could it be doubted that, ifs.
             5 stood alone, and no fine were provided by the Act for B
             contravention of its provisions; a person injured by >a
             breach of the absolute and unqualified duty imposed by
             that section would have a cause of action in respect of that
             breach? Clearly it could not be doubted. That being so, ·
             unless it appears from the whole 'purview' of the Act, to
             use the language of Lord Cairns in the case of Atkinson v.
             Newcastle Waterworks Co., [1877) 2 Ex. D. 441, that it was c
             the intention of the Legislature that the only remedy for
             breach of the statutory duty should be by proceeding for
             the fine imposed by s. 82, it follows that, upon proof of a
             breach of that duty by the employer and in jury thereby
             occasioned to the workman, a cause of action is estab- D
           · lished.' The result of the above construction may be stated
             as follows: prima facie a person who has been injured by
             the breach of a statute has a right to recover damages from·
             the person committing it unless it can be established by
            considering the whole of the Act that no such, right was
            intended to be given. So far from that being shown in this E
            case, the contrary is established. To prosecute for a penalty
            is no sufficient protection and is a poor consolation to the
            injured person though it . affords a reason why persons
            should not commit a breach of the statute."
       Maugham, L.J. and Roche, L.J. agreed wit.h the above view
expressed by Greer, L.J. The above decision was later on approved by      F
the House of Lords in McLeod (or Houston) v. Buchanan, [1940) 2 All
E.R. 179. Summarising the effect of the decision in Monk v. Warbey
(supra) in Shawcross on Motor Insurance, Second.Edition at page 655
it is observed thus:
                 "(1) The owner who delivers his car to a repairer will G
           be liable to a third party who sustains personal in juries and
           is unable to recover from the repairer because the repairer
           has no insurance (g)."      ·
      We agree with the view expressed in Monkv. Warbey (supra). In
India the opinion appears to be divided on the liability of the insurer of H
a m.otor vehicle when the accident giving rise to the claim takes place
    180         SUPREME COURT REPORTS               [1988] Supp. 1 S.C.R.

    when the motor vehicle is in the custody of a repairer. In Vijaya-
A   nagaram Narasimha Rao and Others v. Chanashyam Das Tapadia and
    Others, [1986] ACJ 850, Ramaswamy, J. of the High Court of Andhra
    Pradesh held that once the owner had entrusted the motor vehicle to
    the licensed mechanic to effect repairs, testing being integral part of
    effecting repairs and the accident had taken place during the course of
B testing the vehicle, the necessary conclus.ion was that the mechanic
    acted within his limits of authority and in the course of the employ-
    ment for and on behalf of the owner. Therefore, the owner should be
    vicariously liable for the acts of the mechanic. Accordingly, he held
    that both the owner and the insurance company were also jointly and
    severally liable for the payment of the compensation to the third party,
    who had suffered the injury by virtue of the provisions of the Act. The
c decision of the High Court of Madhya Pradesh in Shantibai and Others
    v. The Principal, Govindram Sakseria Technological Institute, Indore
    and Others, (1972] ACJ 354 is also to the same effect. G.L. Oza, J., as
    he then was, in the course of the said decision rejected the contention
    of the insurance company based on the exemption clause which
D exempted the insurance company from liability arising out of an
    accident during the period when the motor vehicle was used 'for hire
    or used for organised racing, pace-making, reliability speed-testing',
  - which was also one of the contentions urged before us in the present
    case although the said contention C?uld not be urged in the circumst-
    ances of this case. We do not agree with the decision in D. Rajapathi v.
E University of Madurai and Others, (1980] ACJ 113 in which it has been
     held that the doctrine of vicarious liability could uot be extended to a
     case where the accident had taken place on account of the negligence
     of the driver employed by an .independent contractor even when the
     claim is made not under the Law of Torts but under the provisions of
     the Act. While it may be true, as we have observed earlier, that under
F    the  Law of Torts, the owner may not be liable on the principle of
     vicarious liability, the insurer would be liable to pay the compensation
     by virtue of the provisions of section 94 and section 95 of the Act,
     referred to above.
          We may now refer to the decision of this Court in the New
    Asiatic Insurance Co. Ltd. v. Pessumal Dhanamal Aswani and Ors.,·
G   [ 1964] S.C.R. 867. In that case the owner of a motor car had insured it
    with the appellant, insurance company, under a comprehensive policy.
    He had permitted another person, who had insured his own car with
    another company, to drive it and while the other person was driving
    the car it met with an accident. As a result of the accident one person
    died and another person sustained injuries. Both of them were in the
H   car. The heirs of the man who died and the pers0n who sustained
              GURU GOVEKAR v. F. LOBO IVENKATARAMJAH, J.]                181

     in juries filed suits for damages. This Court held that on a considera-
     tion of the provisions of sections 93 to 96 of the Act the insurer was A
     liable to indemnify the person or class of persons specified in the policy
     in respect of any liability which the policy purports to cover in the case
     of that person or those classes of persons. If the policy covers the
     insurer for his liability to the third party, the insurer was bound to
     indemnify the person or classes of person specified in the policy. The B
     same was the effect of sub-section (1) of section 96 of the Act which
     provided that the insurer was bound to pay to the person entitled to
     the benefit of a decree he had obtained in respect of any liability
'    covered by the terms of the policy against any person irrespective of
    ·the fact that the insurer was-entitled to avoid or cancel the policy. This
     meant that once the insurer had issued a certificate of insurance in
     accordance with sub-section {4) of section 95 of the Act the insurer had C
     to satisfy any decree which a person receiving injuries from the use of
     the vehicle insured had obtained against any person insured by the
     policy. He was liable to satisfy the decree when he had been served
     with a notice under sub-section (2) of section 96 of the Act about the
     proceedings in which the judgment was delivered.                           o
          Thus on the facts of the case before us we are of the view that the
    insurer is liable to pay the compensation found to be due to the clai-
    mant as a consequence of the injuties.sQffered by her in a public place
    on account of the car colliding with her on account of the negligence of
    the mechanic who had been engaged by ihe repairer who had under-
    taken to repair the vehicle by virtue of the provisions contained in E
    section 94 of the Act which provides that rio person shall use except as
    a passenger or cause or allow any other person to use a motor vehicle
    in a public place, unless there is in force in relation to the use of the
    vehicle by that person or that other· ·person, as the case may be, a
    policy of insurance complying with the requirements of Chapter VIII
    of the Act. Any other view will expose innocent third parties to go F
    without compensation when they suffer injury on ac~ount of such
    motor accidents and will defeat the very object of introducing 'the
    necessity for taking out insurance policy under the Act.
         We, therefore, allow the appeal and modify the order passed by
    the High Court and direct the insurer, the Oriental Insurance Com- G
    pany Ltd. to pay to the claimant Miss Filomena F. Lobo a sum of
    Rs.90,000 along with interest and costs as directed by the Tribunal.
    The parties shall, however, bear their own costs in this Court and in
    the High Court.

    S.L.                                                    Appeal allowed H