Holding

The hirer, RSRTC, is vicariously liable for the driver’s negligence; the definition of "owner" includes the party in actual possession and control, and Condition 15 does not absolve RSRTC.

Summary

The Rajasthan State Road Transport Corporation (RSRTC) hired a bus from its owner, Sanjay Kumar, and operated it on a route for which it held a permit. The bus, driven by the owner's employee, was swept away over a flooded bridge, killing 23 passengers. The victims' heirs filed claims for compensation under Section 110‑A of the Motor Vehicles Act, 1939, against RSRTC and the insurer. The Tribunal and the High Court held RSRTC liable despite a contractual clause (Condition 15) attempting to shift liability to the owner. On appeal, the Supreme Court interpreted "owner" in Section 2(19) broadly to include the party in actual possession and control, finding that RSRTC exercised such control and therefore bore vicarious liability for the driver’s negligence. The Court also held that Condition 15 could not absolve RSRTC as it was contrary to public policy and did not fully shift liability. Consequently, the appeals were dismissed and RSRTC remained liable for compensation.

Issues considered

Whether the hirer (RSRTC) is liable to pay compensation under the Motor Vehicles Act despite not being the registered owner of the bus.
Whether Condition 15 of the hire agreement can exempt RSRTC from liability for accidents.
How the term "owner" under Section 2(19) of the Motor Vehicles Act should be interpreted in the context of a hired vehicle.
Whether vicarious liability attaches to the hirer when control over the driver is transferred.

Legislation cited

Motor Vehicles Act, 1939s. 110-A, s. 2(19), s. 2(29), s. 2-C(3), s. 42

Subjects

vicarious liabilitymotor vehicle accidentcompensationowner definitionhire agreementCondition 15Motor Vehicles Actpublic policycontrol

Judgment

A RAJASTHAN ROAD TRANSPORT CORPORATION
v.
KAILASH NATH KOTHARI AND ORS. ETC. ETC.

SEPTEMBER 3, 1997

B [DR. AS. ANAND AND K. VENKATASWAMI, JJ.]

Motor Vehicles Act 1939-S. J IO(A)-Claim for compe11sation-
,,-
vicmious liability of the hirer is a question of fact-In Tait, when an employee
is lent, and the effective control over him is with the him; liability to com-
c pens ate passes to the hirer even if the employee is paid by the employe1.......Plivity
of contract of passengers was also with the Transpo1t Co1poratio11-Hence it
is liable.

S. 2(19)--Tenn "owner"--Not be restlicted to the registered owner but
will cover the hirer of the vehicle when it in his possession and control and
::::> D the driver operates under his direction.
-.---
A bus, hired by the appellant - Rajasthan State Road Transport
Corporation (RSRTC) was to ply on routes specified by them and the fares
were collected from the passengers by the Corporation. It was washed away
when the driver, who was the employee of the bus owner, drove over a
E
flooded bridge. The relatives of the victims filed a claim under S. 110 of
the Motor Vehicles Act. The Tribunal found that the accident was the
result of the negligence of the driver; that the liability of the insurance
Company was limited to Rs. 75,000 in all; that RSRTC was liable inspite
of condition 15 in the contract which was against 'public policy' and that
F the claim was filed on time. The Tribunal therefore made a composite
award, in favour of the claimants.

Aggrieved, RSRTC, appealed to the High Court. The High Court
upheld the decision of the Tribunal, relying on its earlier judgments in
RSRTC v. Onkar & Ors., ACC Vol. II 1990-497; Mohd. Raffia v. Mohd. Sadi
G
& Ors. (U11repo1ted S.B. Civil Misc. Appeal No. 223, 270 & 237 of 1984) and
S.B. Civil. Misc. Appeal No. 243 of 1983; RSRTC v. Muralidhar & Ors.,
Division Bench Decision reported in D.B. Spl. Appeal No. 391 of 1990 and
RSRTC v. Rukmani Devi, decided on 4.1.1991.

H The Appellant's contention before this Court was that they were not
724
RAJASTHAN ROAD TPT. CORPN. v. KN. KOTHARI 725

the owner of the vehicle, and the driver was not their employee and A
therefore they were not liable to pay the compensation. They also relied on
condition 15 in the contract of hire which they said, absolved them.

Dismissing the appeal, the Court

B
HELD : 1. Both on facts and in law the liability to pay compensation
for the accident must fall on the RSRTC. It is not disputed that the bus
in question was hired by RSRTC and was running on route for which a
permit had been granted in favour of RSRTC by the competent authority.
It is also not disputed that the permit to ply the bus was in the name of
RSRTC for the specified route and that the bus could not have plied on C
that route except by RSRTC, which had the permit. It is also an admitted
position that the conductor of the bus was an employee of the RSRTC and
that passengers were being carried in that bus on paying the prescribed
fare to the bus conductor, an employee of RSRTC. The fares paid by the
passengers were received by the conductor for and on behalf of RSRTC. D
The bus was given on hire to RSRTC along with the driver, who, however,
was to ply the bus under the instructions of RSRTC. An agreement had
been executed between RSRTC and the bus owner, incorporating various
conditions of contract. The admitted facts unmistakably show that the
vehicle in question was in possession and under the actual control of E
RSRTC for the purpose of running on the specified route and was being
used for carrying, on hire, passengers by RSRTC. The driver was to carry
out instructions, orders and directions of the conductor and other officers
of RSRTC for operation of the bus on the route specified by 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
F

the ill fated bus are concerned, their privity of contract was only with
RSRTC to whom they had paid the fare for travelling in that bus. They
had no privity of contract with S, the owner of the bus at all. Had it been
a case only of the transfer of the services of the driver and not of trnasfer G
of control of the driver from the owner-to RSRTC, the matter may have
be~n different. But on the facts of this case and in view of conditions 4 tu
7 of the agreement, RSRTC must be held to be vicariously liable for the
tort committed by the driver while plying the bus under contract of the
RSRTC. [732-F-H, 733-A] H
726 SUPREMECOURTREPORTS (1997JSUPP.3S.C.R.

A 2. The definition of owner under Section 2(19) of the Act is not
exhaustive. It has, therefore to be construed, in the widest 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
B the registered owner only would in a case where the vehicle is in the actual
-
possession and control of the hirer would 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
C whom vicarious liability can be fastened in the case of an accident. In this
case 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
D 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. The owner of
the bus was therefore not concerned with the passengers traveling in that
bus on the particular route on payment of fare to RSRTC. [734-A-D]

3. The general proposition of law and the presumption arising
E therefrom that an employe1; that is the person who has the right to hire
and fire the employee, is generally responsible vicariously for the tort
committed by the concerned employee during the course of his employment
and within the scope of his authority, is a rebuttable presumption. If the
orginal employer is able to establish that when the servant was lent, the
p effective control over him was also transferred to the hirer, the original
owner can avoid his liability and the temp01wy owner or the hirer as the
case may be, must be held vicariously liable for the tort committed by the
-
concerned employee in the course of his employment while under the
command and control of the hirer notwithstanding the fact that the driver
would continue to be on the pay roll of the original owner. The proposition
G based on the general principle is adequately rebutted in this case not only
on the basis of the evidence led by the parties but also on the basis of
conditions 6 and 7, which go to show that the owner had not merely
transferred the services of the driver to RSRTC but actual control, and
the driver was to act under the instntctions, control and command of the
H conductor and other officers of the RSRTC. [734-H, 735-A-C]
RAJASlliAN ROAD lTI. CORPN. v. KN. KOTHARI [AS. A.NA.ND, J.J 727

4. The second part of condition no. 15 makes it abundantly clear that A
RSRTC did not completely shift the liability to the owner of the bus
because it provided for reimbursement to it in case it has to pay compen-
sation arising out of an accident. The words in the latter part of condition
15 leave no ambiguity in that behalf and clearly go to show the intention
of the parties. Thus RSRTC cannot escape its liability under condition no. B
15 of the agreement either. (735-E, G]

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 4350 of
1993 Etc.

From the Judgment and Order dated 22.1.91 of the Rajasthan High C
Court in S.B.C.M.A. No. 275 of 1989.

Sushil Kumar Jain and AP. Dhamija, for the Appellant.

R.C. Kohli, (Indra Makwana and Dr. Nafis Ahmed Siddiqui) (NP)
for the Respondent for Insurance Co.
D
The Judgment of the Court was delivered by

DR. A.S. ANAND, J. Common questions of law and fact are involved
in this batch of appeals filed by the Rajasthan State Road Transport
Corportion (hereinafter referred to as the 'RSRTC') against the (common) E
judgment of the High Court dated 22.1.1991 upholding composite awards
made by the Motor Accidents Claim Tribunal (hereinafter the Tribunal)
on 13.3.1989 and are, therefore, being disp_os~d of by this common order.

Bus No. RSB 3945, besides some other buses, was hired by the
· RSRTC from its owner Shri Sanjay Kumar - respondent, to ply on the F
routes specified by the RSRTC. An agreement was executed between the
RSRTC and the owner of the bus containing the terms of hiring the bus.

Bus No. RSB 3945 was, on the fateful day, 17.7.1981, being driven by
Gopal and was plying on the route Kakri to Jaipur, for which route RSRTC
had the route permit. At about 9.30 P.M. when the bus was near Renwal, G
it was noticed that water was flowing over the bridge of Bandi river, due
to heavy rains. The passengers travelling in the bus requested the driver
not to drive the bus over the bridge because of overflowing water but their
request had no effect and the driver, despite the warning by the passengers,
drove the bus over the bridge and as a result of flood in the river, the bus H
7']ll, SUPREME COURT REPORTS [1997) SUPP. 3 S.C.R.

A was swept away. As a result 23 passengers travelling in the ill fated bus
died due to the accident. The legal representatives/heirs of the 23
passengers who had died as a result of the accident, filed separate claim
petitions under Section 110-A of the Motor Vehicles Act, 1939 (hereinafter
referred to as the 1939 Act) claiming compensation from the RSRTC and
B the insurance company. The claim petitions were resisted and the RSRTC
in its written statement denied its liability on the ground that though it had
hired the bus in question from Shri Sanjay Kumar and the bus was plying
on the route specified by it, the driver of the bus, Gopal, due to whose
negligence and rashness the accident had taken place, was not an employee
C of the RSRTC but of the bus owner, Shri Sanjay Kumar, and therefore it
was not vicariously responsible for his negligence and rashness. It was also
pleaded that liability to pay compensation in case of an accident was that
of the "owner" and not of the hirer. Reliance in this behalf was placed on
condition No. 15 of the agreement to disown its liability. The insurance
company took the plea, in its reply to the claim petitions, that the bus at
D the time of the accident was under the control of the RSRTC, therefore it
was the liability of the RSRTC to pay compensation and the insurance
company was not liable. It was further pleaded by the insurance company
that the liability of the insurance company, in any event, was limited and
its liability could not exceed Rs. 75,000 in respect of all the claim petitions
E arising out of one accident. The owner of bus, Shri Sanjay Kumar, though
a party to the claim petitions did not file any reply. The following issues
were framed by the Tribunal from the pleadings of the parties :

"(1) whether on 17.7.81 opposite party Gopal was driving bus
F No. R.S.B. 3945 negligently and he drove the bus in the flooded
river and the same was swept away, as a result of which Vijay
Kumar, Ram Kishori Devi, Ram Pal, Prahlad, Galli Devi, Bhanwar
Lal, Mohan Lal, Tabalya, Babli, Jayana, Kanahya Lal, Champa
Devi, Sewa Ram, Laxmi Narain, Kamal Kishore, Miwal Kishore,
Kumari Seema, Vimla Devi, Ram Pyari Devi, Shakuntala De.vi,
G
Km. Bela, Pawan Kumar and Mahesh Kumar died? ,_
(2) whether on the basis of the preliminary objections the
insurance company opposite party is not liable to pay the amount
H of compensation?
RAJASTIIAN ROAD TIT. CORPN. v. K_ N. KOIBARI (AS. ANAND. J.] 729

(3) whether due to the terms and conditions of the contract, A
the Rajasthan State Road Transport Corporation is not liable?

(4) whether petition No. 51/82 having been filed beyond limita-
tion is not liable to be heard?

(5) whether this incident comes within the definition of B
negligence?

(6) Relief."

A number of witnesses were . examined by the parties and after C
considering, both oral and documentary evidence, the Tribunal held that
the bus driver (non applicant No. 3) drove Bus No. 3945 on 17.7.1981
carelessly and negligently and caused the accident which resulted in the
death of 23 persons. Issue No. 1 was decided accordingly in favour of the
claim petitioners. Issue No. 2 was also decided in favour of the claim
petitioners but it was held that in the light of the terms of the policy of D
...... insurance and relevant provisions of the Act, the liability of the insurance
company was limited, in respect of the accident, to a total amount of Rs.
75,000 only.

Insofar as issue No. 3 is concerned, the Tribunal noticed condition E
No. 15 of the contract of hire executed between the RSRTC and the owner
Shri Sanjay Kumar and opined that the same was against 'public policy'
and therefore could not discharge the RSRTC from its liability, ·It was
noticed that the bus was plying on the route specified by the RSRTC and
the passengers had paid their fares to the conductor who was admittedly
F
an employee of RSRTC, and as such the RSRTC could not escape from
its liability. Accordingly, issue No. 3 was also decided in favour of the claim
petitioners and the RSRTC was held liable to pay compensation to the
claimants. On issue No. 4 the Tribunal found that claim petitions were filed
within time, after condoning the delay which had been properly explained.
Issue No. 5 was also decided in favour of the claim petitioners and different G
amounts were awarded in each of the claim petitions by a composite award .
while granting relief under issue No. 6.

Aggrieved, by the composite award dated 13.3.1989 of the Tribunal,
the appellant filed appeals against each of the award in the High Court H
730 SUPREME COURT REPORTS (1997] SUPP. 3 S.C.R.

A The High Court also negatived the plea of RSR TC that since it was only
a hirer and not the owner of the bus, it could not be fastened with any
liability for payment of compensation, relying upon its earlier judgments in
RSRTC v: Onkar & Ors., (ACC Vol. II 1990-497); Mohd. Raffiq v. Mohd.
Sadi & Ors., (unreported SB Civil Misc. Appeal Nos. 223, 270 & 237 of
B 1984) and S.B. Civil Misc. Appeal No. 243 of 1983; RSRTC v. Murlidhar &
Ors., besides a Division Bench decision reported in D.B. Spl. Appeal No.
391 of 1990 RSRTC v. Rukmani Devi, decided on 4.1.1991. The High Court
also rejected the plea raised on behalf of the insurance company that the
liability of the insurance company could not extend to an accident of the
C type which had occurred in the present case and found that the Tribunal
had rightly decided issue No. 2. The composite award made by the Tribunal
in respect of various claim petitions was accordingly upheld by the High
Court vide common judgment dated 22.1.1991. The RSRTC has ap-
proached this Court by Special Leave in all the cases. At the time of
D hearing, the controversy in this Court has ben confined to the findings on
issue No. 3 and no other finding has been called in question.

The thrust of argument of learned counsel for the appellant, was that
the appellant not being the owner of the bus was not liable to pay any
E compensation arising out of the accident because the driver, who was
driving the bus at the relevant time, was in the employment of the owner
of the bus, Shri Sanjay Kumar and not of RSRTC and as such it could not
be held vicariously liable for the rash and negligent act to the driver.
Reference was also made to condition No. 15 of the agreement, to urge
that the RSRTC was not liable to pay compensation to the heirs of the
F deceased passengers and that the liability to pay compensation to them was
of the owner of the bus, Sanjay Kumar. Learned counsel appearing for the
insurance company, did not question the finding on issue No. 2 and
submitted that the specified amount had since been paid by the insurance
company. He did not dispute the correctness of the findings recorded by
G the Tribunal and the High Court on issue No. 3. The claimant respondents
remained unrepresented, despite service, before us.

We have given our careful consideration to the submissions made at
the bar by learned counsel for the appellant and for what follows we are
H not able to persuade ourselves to agree with him and take a view different
RAJASTHAN ROAD 1YT. CORPN. ''· K. N. KOTHARI fA.S. ANAND, J.] 731

than the one taken by the Tribunal and the High Court. Let us first look A
)· at some of the relevant statutory provisions.

Section 2-C(3) defines "contrct carriage" :

"Sec. 2-C(3) "contract carriage" means a motor vehicle which
carries a passenger or passengers for hire or reward under a B
contract expressed or implied for the use of the vehicle as a whole
at or for a, (fixed or agreed rate or sum-

(i) on a time basis whether or not with reference to any route
or distance, or
c
(ii) from one point to another; and m either case without
stopping to pick up,) .

or set down along the line of route passengers not included in
the contract, and includes a motor cab notwithstanding that the D
passengers may pay separate fares;"

,l Section 2(19) defines an owner in the following terms :-
'
"Sec. 2(19)-"0wner" means, where the person in possession E
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."
."" F
By Section 2(29) the "stage carriage" has been defined as -

"Sec. 2(29) - "stage carriage" means a motor vehicle carrying or
adapted to carry more _than six persons excluding the driver which
carries passengers for hire or reward at separate fares paid by for
individual passengers, either for the whole journey or for stages of G
the journey."

Section 42 deals with the "necessity for permits" and lays down :

"Sec. 42 - Necessity for pennits - (1) No owner of a transport
vehicle shall use or permit the use of the vehicle in any public place H
732 SUPREME COURT REPORTS (1997) SUPP. 3 S.C.R.

A (whether or not such vehicle is actually carrying any passenger or
goods) save in accordance with the conditions of a permit granted <
or countersigned by a Regional or State Transport Authority (or
the Commission) authorising the use of the vehicle in that place
in the manner in which the vehicle is being used :
B Provided that a stage carriage permit shall, subject to any
conditions that may be specified in the permit, authorise the use
of the vehicle as a contract carriage :

c Section 110-A provides that an application for compensation arising
out of an accident may be made by the person who has sustained the injury
or if death has resulted from the accident, by all or any of the legal
representatives of the deceased or by the owner of the property damaged
D by the accident or by any agent duly authorised by the person injured or
by the legal representatives of the deceased, as the case may be.

Having noticed the relevant provisions of the 1939 Act, which
admittedly apply to the instant case, we now address ourselves to test the
correctness of the submission that since the RSRTC was not the owner of
E the vehicle, as such the liability to pay compensation for an accident caused
by the bus hired by it, cannot be fastened on the appellant and the effect
of condition No. 15 of the agreement. Certain admitted facts need a notice
at this stage.

F It is not disputed that the bus in question was hired by the RSRTC
and was running on the route for which a permit had been granted in
favour of the RSRTC by the competent authority. It is also not disputed
that the permit to ply the bus was in the name of RSRTC for the specified
route and that the bus could not have plied on that route except by the
RSRTC, which had the permit. It is also an admitted position that the
G conductor of the bus was an employee of the RSRTC and that passengers
were being carrid in that bus on paying the prescribed fare to the bus
conductor, an employee of the RSRTC. The fares paid by the passengers
were received by the conductor for and on behalf of the RSRTC. The bus
was given on hire to RSRTC along with the driver, who, however, was to
H ply the bus under the instructions of RSRTC. That an agreement had been
RAJASTHAN ROAD TPT. CORPN. v. KN. KOTHARI (AS. ANAND, J.) 733

executed between RSRTC and the bus owner, Shri Sanjay Kumar, A
incorporating various conditions of contract.

Conditions 4 to 7 and 15 of the agreement executed between the
RSRTC and the owner reac,l :

"4. The corporation shall appoint the conductor for the opera- B
tion of the bus given on contract by the second party and the
conductor of the Corporation shall do the work of issuing tickets
to the passengers, to receive the fare, to all the p11ssengers to get
in and get out of the bus, to help the passengers to load and unload
their goods, to stop the bus at the stops fixed by the Corporation C
and to operate the bus according to time table.

..., 5. The tickets, way-bills and other stationary shall be supplied by
) the Corporation to the said conductor of the corporation."
'
I.
6. The driver of the bus shall have to follow all such instructions D
of the conductor, which shall be necessary under the rules for the
operation of the bus."

7. The driver of the bus shall comply with all the orders of the
corporation or of the officers appointed by the corporation." E

15. Upon the accident of the bus taking place the owner of the bus
shall be liable for the loss, damages and for the liabilities relating
to the safety of the passengers. The Corporation shall not be liable
for any accident. If the Corporation is required to make any F
payment or incur any expenses through some Court or under some
mutual compromise, the Corporation shall be able to recover such
amounts from the owner of the bus after deducting the same from
the amounts payable to him."

The admitted facts unmistakably show that the vehicle in question G
was in possession and under the actual control of RSRTC for the purpose
of running on the secified route and was being used for carrying, on hire, ·
passengers by the RSRTC. The driver, was to carry out instructions, orders
and directions of the conductor and other officers of the RSRTC for
operation of the bus on the route specified by the RSRTC. The definition H
734 SUPREME COURT REPORTS [1997] SUPP. 3 S.C.R:

A 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 circumstance· 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
B 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 com~itted 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
C 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
who.se directions, instructions and. command the driver was to ply or not
· D 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
pot 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
E under the order and command of the conductor of RSRTC for operation
of the bus. So far as the passengers o( the ill fated bus are concerned, their
privily 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 respon-
sibility of the RSRTC while travelling in the bus. They had no privily of
contract with Shri Sanjay Kumar, the owner of the bus at all. Had it been
F a case only of transfer of services of the driver and not of transfer of control
of the driver from the o\Vner to RSRTC, the matter may have been some
what 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
G 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 com-
.milted by the concerned employee during the course of his employment
and within the scope of his authority, is a rebuttable presumption. If the
H 01iginal employer is able to establish that when the servant was lent, the
RAJAS1HAN ROAD TIT. CORPN. v. KN. KOTHARI [AS. ANAND, J.) 735

effective control over him was also transferred to the hirer, the original A
owner can avoid his liability and the temporary employer or the hirer, as the
case may be, must be held vicariously liable for the tort committed by the
concerned employee in the course of his employment while under the
command and control of the hirer not withstanding the fact that the driver
would continue to be on the pay roll of the original owner. The proposition B
based on the general principle as noticed above is adequately rebutted in
this case not only on the basis of the evidence led by the parties but also
on the basis of conditions 6 and 7 (supra), which go to show that the owner
had not merely transferred the services of the driver to the RSRTC but
actual control and the driver was to act under the instmctions, control and
command of the conductor and other officers of the RSRTC. C
Reliance placed by learned counsel for the appellant on condition
No. 15 of the agreement (supra) in our view is misconcieved. Apart from
the fact that this cluase in the agreement between the owner and the
RSRTC, to the extent it shifts the liability for the accident from the RSRTC D
to the owner, may be against the public policy as opined by the High Court,
though we are not inclined to test the correctness of that proposition of
law because on facts, we find that RSRTC cannot escape its liability to pay
compensation. The second part of condition No. 15 makes it abundantly
clear that the RSRTC did not cpmpletely shift the liability to the owner of
the bus because it provided fqr reimbursement to it in case it has to pay
E
compensation arising out of an accident. The words :

"if the Corporation is required to make any payment or incur
any expenses through some Court or under some mutual com-
promise, the Corporation shall be able to recover such amounts F
from the owner of the bus after deducting the same from the
~ amounts payable to him"

In the later part of condition No. 15 leave no ambiguity in that behalf and
clearly go to show the intention of the parties. Thus, RSRTC cannot escape G
its liability under condition No. 15 of the agreement either. Thus, both on
/I facts and in law the liability to pay compensation for the accident must fall
on the RSRTC.

Thus, for the additional reasons noticed by us above, we find that
both the Motor Accidents Claim Tribunal and the High Court of H
736 SUPREME COURT REPORTS (1997] SUPP. 3 S.C.R.

A Rajasthan, committed no error in fastening the liability to pay
compensation to the heirs of the deceased passengers on the appellant.
There is no merit in these appeals, which conseuently fail and are dismissed
but since the claimant respondents have remained unrepresented before
us, with no order as to costs.
B I.M.A. Appeals dismissed.