The Union Motor And Gekeral Insurance Co., Ltd., Madras v. M. Kannappa Naicker And Another

This appeal arises out of an order passed by the Motor Accidents Claims Tribunal (District Judge), Chingleput, awarding compensation in a sum of Rs. 5,000 to the first respondent herein, whose son, a boy aged about 14, studying in VII Standard in the Municipal High School, Kancheepuram, died as a result of having been hit by a passenger bus, MDH 2265 owned by the second respondent-transport company. The appellant was also made a party in the claim petition of the first respondent, as the bus was insured with them. The Insurance Company has preferred this appeal canvassing the correctness of the decision of the Tribunal in awarding compensation to the first respondent. They have contended that there is no liability to pay compensation, as there was a breach of the conditibns incorporated in the Insurance Policy. The Tribunal below has negatived the contention of the Insurance Company and directed the Insurance Company to pay the compensation amount. Therefore, the question that arises for my consideration in this appeal is whether the Insurance Company is liable to pay compensation to the father of the deceased boy. It is, therefore, necessary to state some more facts.

The second respondent-transport company are the owners of the passenger bus MDS 2265, which has a seating capacity of 47 including the driver. On the fatetul day, this bus was not in use or service, as it had been left with the Rural Bus workshop for effecting repairs to the said bus. The repairs were parried out byone mechanic, Palaniswami; by name. After the repairs, he took out the bus for a test drive, and it was during the course of the trial drive that the unfortunate accident occurred to the son of the claimant. It is in evidence that Palaniswami is not in possession of an effective driving licence authorising him to drive heavy vehicles. He has been given a licence only to drive motor cars (light motor vehicles). Under no stretch of imagination can he be said to possess a licence to drive heavy vehicles like an omnibus. Therefore learned Counsel for the appellant-Insurance company contended before me that, when the bus was handed over to the workshop for repairs, the Insurance policy was suspended for the time being. He further contended that it was during that period of the suspension of the policy that Palaniswami, the mechanic who did not possess the requisite driving licence to drive a heavy vehicle, took out the bus in question and caused the accident to the son of the claimant. Learned Counsel therefore contended that the Insurance Company, would not be liable to pay compensation either to the insured or the father of the deceased boy, on account of :he deliberate breach of the conditions of the policy.

It will be useful to refer, in this connection, to the relevant conditions in the Insurance Policy, under the head “General Exception”:

“The Company shall not be liable under this policy in respect of (1)……(2)……

(3) any accident, loss, damage and/or liability caused, sustained or incurred whilst the motor vehicle is, (a) ..…; (b) being driven by any person other than a driver”.

Learned Counsel had contended that Palaniswami is not a driver of the bus that further “he, does not possess; a valid licence to drive heavy vehicles and that therefore the Insurance company would not be liable to pay compensa-. tion to the father of the deceased boy. Palaniswami has himself admitted that he has no licence, with “Heavy “endorsement. The Tribunal has observed that it could not he said that Ralaniswami was driving without a licence. I am unable to agree. A “heavy motor vehicle “has been defined in S. 9 (9) of the Motor Vehicles Act as a transport vehicle of omnibus the registered laden weight of which exceeds 3200 kilograms; and S. 2.(13) defines a” light motor vehicle “as a transport vehicle or omnibus the registered laden weight of which does not exceed 3000 kilograms. Merely looking ait the definitions, one can safely say that an omnibus having a capacity for 47 passengers is certainly a heavy vehicle. Once 1 come to the conclusion that the bus in question is a heavy motor vehicle, I must also core, elude that Palaniswami did not possess a licence and drive the bus in question which is a heavy vehicle. Therefore the appellant-Insurance company is right in their contention that, when Palaniswami took the bus for a test drive, he did hot possess the requisite licence for driving it and that further the bus was driven by a person other than a driver.

In regard to the contention urged by learned Counsel for the appellant that in any event the policy was suspended for the time being when the bus was handed over for repairs, it is Useful to refer to the passage in Hahbury's Laws of England, 3rd Edn. Vol. 22 page 234, paragraph 445:

“There may, however, be an alteration tion not affecting the identity of the subject-matter which amounts to an alteration of the risk, if by reason of the alteration the risk as altered ceases to correspond with the risk as defined in the policy — Unless the policy expressly so provides, the alteration of the risk does not avoid the policy, but merely suspends its operation during the continuance of the alteration. If the subject-matter is returned to the locality described or again used in accordance with the description, the policy reattaches.”

In Robberts v. Anglo Saxon Insurance Association Ltd.(1) a vehicle was insured for commercial travelling. When ‘ it was used for carrying passengers and an accident occurred, it was held that the insurers were not liable, as that was not within the risk described. The use of the vehicle for an unpermitted purpose does not, however, in the absence of a clear provision to that effect give the insurers a tight to avoid the policy altogether for all time and for all purposes. The result, is merely to suspend the operation of the policy for the duration of the unpermitted use. As soon as the unpermitted use ceases and use for a permitted purpose is resumed, the policy again attaches itself. It is usual in the business of motor insurance to providea clause of suspension of policy under certain circumstances. All policies contain a number of general exceptions and the operation of any one of the exceptions entitles the insurers to repudiate the liability under the policy. If we apply the above principles to the instant case it is clear that theowner of the vehicle did not give his consent to Palaniswami to drive the vehicle. Nor did Palaniswami obtain the consent of the owner of the bus to take out the bus for the test drive. Further Palaniswami could not be called either the servant or the agent of the insured. He is after all an independent person who undertook to effect the repairs of this motor vehicle. Learned Counsel for the appellant brought to my notice the case of Hewitt v. Benvin. In that case with the permission of his mother, a son took out his father's car. The son wanted the car for his own purposes in order to drive two girls to friends home. On the way back, through the neglect driving of the son, the car was upset and a friend who had accompanied the party was killed. In an action by the administrator of the deceased friend against the father, the owner of the car, it was held by the Court of Appeal that the son was not driving the car as his father's servant or agent or for his father's purposes and that therefore the father was not liable for his son's tortious act. Applying the principle of that case to the facts of the present case, I feel that Palaniswami when he was driving the heavy vehicle was not either the servant or the agent of the owners of the motor vehicle. Palaniswami was not under their control and he was not given any directions at the time of the carrying out of the repairs. As observed by Du Parcq, L.J in the judgment just cited, it has long been settled law that where the owner of a carriage or other chattel confides it to another person who is not his servant or agent, he is not responsible merely by reason of his ownership, for any damage which it may do in that other's hands.

In determining whether the relationship of master and servant exists, a number of questions may have to be considered like the nature of the task undertaken, the freedom of action given, the magnitude of the contract amount, the manner in which it is to be paid, the powers of dismissal and the circumstances in whieh the payment of the reward may be withheld. But a guiding and final test lies in the nature and degree of detailed control over the individual alleged to be in the relationship of servant. The question of control is of considerable importance, and the Courts have carried the doctrine of Control to such an extent as to make the owners of cars who retain control of the vehicle liable for the torts of persons to whom the car has been loaned without any relation of master and servant existing. The owner of a vehicle is responsible for the negligent driving of such vehicle by his agent or servant, if he (owner) retains control. But the law has considerably extended the liability of the owner of the vehicle for the damage which may result from its negligent use. Whether or not the owner be liable depends upon whether in fact he'has retained control. In this connection, it is useful to refer to the decision in Chowdry v. Gillot(2) where the plaintiff took his motor car to the manufacturers for repairs and, after handing it over to the company's receptionist, he asked if he could have a lift to the nearest railway station. The manufacturers’ servant was instructed to drive him to the station in the plaintiffs' own car. An accident occurred, owing to the negligence of the driver of the company. In an action brought by the plaintiff for damages, it was held that having received the car for repairs, the company were, at the time of the accident, in possession of it as bailees, and, so long as the bailment continued, the owner had no right to control the bailees' servants. It was therefore held that the company was liable for the driver's acts of negligence. Similarly, in Lakshminarayan Ram Gopal and Son v. Hyderabad Government(3) their Lordships of the Supreme Court drew the distinction between master and servant and principal and agent thus.:

Generally, a servant is a person Who not only receives instructions from his master but is subject to his master's right to control the manner in which he carries out those instructions. An agent receives his principal's instructions but is generally free to carry out those instructions according to his own discretion.”

His Lordship Bhagawati, J. also extracted the following passage in Halsbiiry's Laws of England Hailsham Edn. Volume I, at page 193, Art. 345, where the positions of an agent, a servant and independent contractor arc thus distinguished:

An agent is to be distinguished on the one hand from a servant, and on, the other from an independent contractor. A servant acts under the direct control and supervision of his master, and is bound to conform to all reasonable orders given him in the course of his work; an independent contractor, on the other hand, is entirely independent of any control orinterference and merely undertakes to produce a specified result employing his own means to produce that result. An agent, though bound to exercise his authority in accordance with all lawful instructions which may be given to him from time to time by his principal, is not subject in its exercise to the direct control or supervision of the principal.”

On a review of the case law on the subject, I am of opinion that Palaniswami the mechanic who undertook to repair the bus belonging to the second respondent company is neither his servant nor his agent but an independent contractor. Therefore the second respondent company had no control over him at the time of the accident, and therefore when the second respondent company's bus which has been insured with the appellant company was involved in an accident, the policy of insurance was suspended at that time and it was during the period of suspension of the policy that the vehicle was driven by a person other than the driver of the transport company who further did not a possess a valid licence to drive that vehicle. In those circumstances, the appellant insurance company is entitled to ask for a declaration that they are not liable for the risk, as the accident occurred during the period when the policy has been suspended. The claimant will be entitled to get compensation only from the owner of the bus company, that is the second respondent herein.

In the result, the appeal is allowed. There will be no order as to costs.

V.C.S