1. As these two appeals arise out of the same award passed by the Motor Accidents Claims Tribunal Cuddalore in the same claim petition arising out of an accident they are dealt with together.
2. On ra-5-1974 at about 4-30 a. m. an Ambassador tourist taxi bearing registration No. MSL 8304, belonging to the appellant in C.M.A. No. 247 of 1977, and insured with the appellant in C. M. A. No. 367 of 1977, dashed against a stationary lorry near Ulundurpet railway gate. The said accident resulted in the death of three persons and injury to four persons who traveled in the taxi. On the basis that the accident was due to the rash and negligent driving of the taxi by its driver, the claim petitions had been filed by the dependents of the deceased as also the insured before the Motor Accidents Claims Tribunal.
3. One of the persons who died in the accident, is one Abdul Rahman. His widow and two minor sons had claimed a sum of Rs. 1,00,090, as compensation in C P. No. 109 of 1974. We are not now concerned with the claim put forward by the dependents of the other deceased and insured. We are concerned in these appeals only with reference to the claim nude by the dependents of the said Abdul Rahman.
4. The claim was resisted by the owner of the taxi as well as the insurer with whom the taxi has been insured. They were respondents 1 and 2 in the claim petition. Their case was that the taxi was authorised to carry only five passengers, but, the driver unauthorisedly carried two more passengers and that as the taxi which was authorised to carry only five passengers, carried seven passengers, the accident can be taken to be due to the negligence of the driver. They also contended that the amount claimed as compensation was exhorbitant. In the face of the above rival contentions, the Tribunal framed the following two points for consideration:-
1. Whether the accident was due to the rash and negligent driving of the vehicle MSL 8M?
2. Whether the claimants are entitled to get compensation and if so to what amount?
The Tribunal after considering the evidence adduced by the parties in this case and also the parties in the other, claim petitions, held that the accident was due to the rash and negligent driving of the taxi driver, and that there is a vicarious liability on the part of the owner of the taxi and also the insurer to meet the claim put forward by the claimants.
5. On the question of compensation the Tribunal held that deceased was earning an average income of Rs. 350/- per month and adopting 28 years purchase as the basis, fixed the compensation at Rs. 1,20,960. But taking into account that the lump sum payment was to be made, it quantified the compensation at Rs. 50,000. As against the said award, the owner of the taxi has filed C. M. A. No. 247 of 1977 and the insurer has filed C. M. A. No. 367 of 1977. The claimants not satisfied with the award of compensation of Rs. 50,000 have filed cross objections in both the above appeals.
6. Learned counsel for the appellants in C. M. A. No. 247 of 1977, contends that on the facts of this case, it could clearly be seen that the driver of the tourist taxi has acted outside his authority in taking two more passengers than the permitted capacity and as the accident had occurred while he was carrying an unauthorised load of seven passengers as against the permitted load of five passengers, the owner of the taxi who had not authorised the taxi driver to take in more passengers than the permitted capacity, cannot be held liable.
7. Learned counsel for the appellants in C. M. A. No. 367 of 1977, contends that whatever be the liability of the owner of the taxi, the liability of the insurer is limited to Rs. 50,000, in respect of one accident and with reference to each passenger, the liability is limited to Rs. 10,000, and that in this case, the Tribunal had erred in awarding a sum of Rs. 37,000, to the claimants in C. P. No. 109 of 1974, in utter disregard of the provisions in Section 95 (2)(b) (ii) (4). In cross objections filed in both the appeals, the claimants have sought for higher compensation than the compensation of Rs. 50,000 awarded by the tribunal.
8. In these appeals, the finding of the Tribunal that the accident was due to the rash and negligent driving by the taxi driver, has not been questioned. Therefore, we have to proceed on the basis that the accident had occurred only due to the rash and negligent driving of the driver of the taxi. Thus, the three questions that arise for consideration in these appeals are:-
1.Whether the owner of the taxi is vicariously liable (for the accident that has been caused by the driver of
the taxi by his rash and negligent driving?
2. What is the extent of liability of the insurer in the event of the owner of the taxi being vicariously held liable for the accident?
3. Whether the compensation awarded by the Tribunal is fair and reasonable? According to the learned counsel for the owner of the taxi, as the driver of the taxi in this case has acted beyond his authority in taking more passengers than the permitted capacity, the owner is not vicariously liable. Learned counsel would say that apart from the fact that the owner of the taxi did not permit the driver to take more passengers than the permitted limit, according to the permit the taxi cannot carry more than five passengers and therefore, the driver by taking unauthorisedly two more passengers than the permitted capacity, has not only acted without the requisite authority of the owner of the taxi,, but also against the specific prohibition contained in the permit issued for the taxi. Learned counsel drew our attention to the following decisions and submitted that the principle laid down in those decisions squarely applied to the facts of this case.
9. Mohiddinsab Gaffarsab Kundgol v. Rohidas Hari Kindalkar, 1973 ACJ 424, is a decision of the Division Bench of the Mysore High Court, wherein the Bench held that where the driver of a goods vehicle picked up a passenger and the passenger sustained injuries on account of accident of the vehicle, the owner of the vehicle cannot be held vicariously liable to pay compensation, because giving a lift to a person in a goods vehicle by the driver is outside the scope of his employment, In that case, reference has been made to the decision in Twine v. Beans Express Ltd., (1946) 1 All ER 202, where Uthwatt, J., has observed while dealing with almost a similar set of facts as follows:-
'It was outside the scope of the driver's employment for him to bring with in the class of persons to whom a duty to take care was owed by the employer a man to whom, contrary to his instructions, he gave a lift ....'
In Sitaram Motilal Kalal v. Santanprasad Jaishanker Bhatt, 1966 ACJ 89: AIR 1966 SC i697, the Supreme Court while dealing with the owner of a car who entrusted it to another for plying it as a taxi and the latter given it to the cleaner for taking a driving test and the vehicle knocking down in an accident resulting in injuries to a third party, held that the owner of the vehicle was not vicariously liable for the tort committed by the cleaner who was driving the vehicle at the time of the accident. The reasoning of the Supreme Court is as follows. It is a settled law that a master was vicariously liable for the acts of his servant acting in the course of his employment, Unless the act was done in the course of employment the servants act would not make the employer liable.
The act must be either a wrongful act authorised by the master or a wrongful and unauthorised mode of doing some act authorised by the master. The scope not be of employment of a servant need viewed narrowly, but the essential element that the wrong must be committed by the servant during the course of employment, i.e., in doing the master's business, ought always to be present. It was not essential that the act of the servant should be for the master's benefit. The Supreme Court dealing with the question of master's vicarious liability observed as follows:-
'A master is vicariously liable for the acts of his servant acting in the course of his employment. For the master's liability to arise, the act must be a wrongful act authorised by the master or a wrongful act unauthorised mode of doing some act authorised by the master. The driver of a car taking the car on the master's business makes him vicariously liable if he commits an accident. Bit it is equally well settled that if the servant at the time of the accident is not acting within the course of his employment but is doing is something for himself, the master is not liable. There is a presumption that a vehicle is driven on the master's business and by his authorised agent or servant but the presumption can be met'.
The Supreme Court held on the facts of the case before them that the owner was not liable for the tort committed by the cleaner who drove the vehicle.
10. In Machiraju Visalakshi v. Treasurer Council of India, Mission of Luthern Church in America, Guntur, : AIR1978AP310 , the driver of a car picked up passengers while the car was being driven for master's business. The driver was not authorised by the master to pick up passengers en route. The car after picking up the passengers dashed against a tree resulting in the death of passengers picked up unauthorisedly by the driver. The question arose as to whether the owner of the car was vicariously liable for the tort committed by the driver. The Bench of the Andhra Pradesh High Court held that the act of the driver in picking up passengers is not within the scope of the employment and therefore, the owner of the vehicle cannot be held vicariously liable in this case, the learned Judges had applied the principle laid down in Sitaram. v. Santhanuprasad, : 3SCR527 and held that unless it is proved that the owner of the vehicle had authorised the driver to carry passengers en route while going on master's business, the master is not liable for the tort committed by the driver with reference to the passengers carried unauthorisedly.
11. In Rajagopalan v. Mohanan : (1979)2MLJ460 , a Division Bench of this Court to which one of us was a party had dealt with a case of a vehicle tempo-which was intended to carry only goods and not any passenger. It was involved in an accident which resulted in injury to a passenger who was carried in the vehicle unauthorisedly by the driver. The question arose as to whether the owner of the vehicle is vicariously liable for the injuries sustained by the passenger. It was held that the owner of the vehicle is not vicariously liable for the tort committed by the driver in the absence of materials to indicate that the deceased was travelling in the tempo in the course of his employment.
12. Out of four decisions referred to above, the decisions in Mohiddinsab Gaffarsab Kundgol v. Rohidas Hari Kindalkar, 1973 ACJ 424 and Rajagopalan v. Mohanan : (1979)2MLJ460 , deal with different set of facts. In those cases, the vehicle was intended to carry goods and not passengers and therefore, any unauthorised carriage of passengers by the driver contrary to the instructions of the owner, of the vehicle and also contrary to the permit conditions was taken to be outside the scope of the driver's employment. There the employment of the driver by the owner of the vehicle was only for the purpose of carrying goods from one place to another and the contract of employment deft not include the transport of passengers from one place to another. In these circumstances, it has been held in those two decisions that the driver of the vehicle has acted beyond the scope of his employment and therefore, no vicarious liability can be fastened on the owner of the vehicle. The case before the Supreme Court in Sitaram Motilal Kalal v. Santanuprasada Jaishankar Bhatt, : 3SCR527 , was in respect of a vehicle which has been entrusted to another for the purpose of running it as a taxi and that another allowing the cleaner to drive the vehicle. Admittedly, the cleaner who drove the vehicle was not employed by the owner of the vehicle to drive the same. So the tort committed by him while driving the vehicle has been taken not to arise in the course of Ws employment. Only the decision in the Division Bench of the Andhra Pradesh High Court in Machiraju Visalakshi v. Treasurer, Council of India, Mission of Luthern Church in America, Guntur, : AIR1978AP310 , is very near to the case on hand. But, even there, the car which was involved in the accident, was a private car and the driver of the car while going an master's business picked up passengers without the authority of the master and therefore, it was for that reason, the Court, held that the unauthorised picking up of passengers by the driver without due authority from his master was taken to be an act not within the scope of his employment. However, the facts in this case are slightly different. The vehicle involved is a tourist taxi and it was intended to carry passengers. Therefore, no specific authority is required to carry passengers an the vehicle from the owner of the vehicle. It is true, in this case, the driver of the vehicle has carried more than the permitted load of passengers and this is contrary to the conditions of permit under which the vehicle was allowed to be used as a tourist taxi. The non-observance of the rules relating to the number of passengers to be carried can only be said to be an improper performance of the driver's duties. Even assuming that the permit condition not to take more than the permitted number of passengers is taken as a prohibition limitation or restriction, that relates only to the manner of performance of the driver's duties in the course of his employment and that cannot in any way limit the sphere of his employment. Admittedly, the employment of the driver is to transport passengers in the tourist taxi collect the fare from them and make it over to the owner of the taxi.
13. As pointed out in Canadian Pacific Rly. Co. v. Leonard Lockhart, AIR 1943 PC 63, there is a clear cut distinction between a restriction or a limitation which pertains to the sphere of employment and those which relate to the manner of performance of his duties within the sphere of his employment. A restriction relating to the number of passengers to be carried can only be taken to be a restriction relating to the manner of performance of driver's duties and it does not relate to the sphere of the employment. In this view of the matter, we are inclined to take the view that the carriage of two excess passengers by the driver of the taxi will only amount to an improper performance of his duties as a driver of a taxi and that, therefore, it cannot be taken to be outside the sphere of his employment. We have to hold therefore that the owner of the taxi is vicariously liable for the tort committed by the driver of his taxi. We also find that similar view has been taken by the Kerala High Court in Kesavan.Nair v. State Insurance Officer, 1971 ACJ 219 and the Gujarat High Court in Amthiben v. Supdt., Geophysist, ONGC, 1976 ACJ 72.
14. Coming to the award of compensation the quantum of which has been challenged by the owner of the taxi, it is seen that the Tribunal has taken the monthly income of the deceased at Rupees 360 based an the income-tax assessment year 1974-75. Since the deceased was aged 27 at the time of the accident, the tribunal assumed that he would have lived for another 28 years and earned the same amount of income. The Tribunal- has not allowed any deduction for personal expenses and it has not also determined separately the dependency of the family on the income of the deceased. Having determined the compensation under the head of pecuniary low for a period of 28 years, at Rs. 1,20,960, the Tribunal, however, restricted the compensation to Rs. 50,000 taking into account the award of compensation in a lump sum.
15. The contention of the learned counsel for the owner of the taxi is that the quantum has been fixed quite arbitrarily by the Tribunal. It is submitted that the Tribunal was not justified in taking Rs. 360 to be the monthly income of the deceased based on the assessment order, that the tribunal has ignored the fact that the income received by the deceased is by virtue of his position as a partner in a family partnership and that it cannot be taken to be the exclusive basis for determining the income of the deceased. It is also pointed out that the other partners have also been assessed for the same amount of income which will show that the income lips not been earned by deceased as a result of his personal exertion. But, a perusal of the evidence of P. W. 5 shows that the partnership business was conducted only by the deceased and not by the other partners. If really there was an exertion on the part of the deceased and that brought income to the partnership business, the personal services of the deceased should be quantified in terms of money.
16. We are inclined to agree with the learned counsel for the appellant that the income earned by the deceased as a partner of the firm cannot be taken to be an exclusive basis for determining the pecuniary loss suffered by the family as a result of his death as the share of partnership assets continues with the family even after his death. However, taking into account the status of the deceased and his family and his capacity and ability to do business it can be taken that the deceased would have, out of his earnings either as a partner of the family concern or otherwise, contributed to the family at least a sum of Rs. 150. Taking the monthly dependency of the family at Rs. 150, and taking, the longevity of the deceased at 55, the pecuniary loss would have come to Rupees 48,600. In this case, though the Lower court has not awarded any compensation for loss of expectation of life, we are inclined to grant a sum of Rupees 5,000 under that head for the reason that the deceased died at an young age of 27 years leaving behind his wife and children. Therefore, the total sum comes to Rs. 53,600. But, we have not taken 4nto account the uncertainties of life, which is a relevant factor to be taken into account and the benefit of lump sum payment instead of the benefit which they will receive monthly if the deceased had been alive. Therefore, towards the uncertainties of life and also for the benefit of lump sum, we deduct a sum of Rs. 8,600. Thus the proper and reasonable compensation in this case comes to Rs. 45,000. We therefore fix the compensation payable to the claimants at Rs. 45,000 as against the compensation awarded by the lower court.
17. Coming to the stand taken by the Insurance Company in C. M. A. No. 367 of 1977, it is seen that Section 95 (2) (b) (H) (4) of the Motor Vehicles Act, specifically provides two limitations in relation to the liability of the insurer in respect of an accident in which a vehicle carrying passengers is involved. Section 95 (2) says. a policy of insurance shall cover any liability incurred in respect of any one accident up to certain limits. One limit is contained in cl. (b) (H) (1), which says that the insurer is liable to pay Rs. 50,000 in 411 w1mere the vehicle is registered to carry not more than 30 passengers. The second limitation is contained in clause (b) (ii) (4) and that limitation is that subject to the limit of Rs. 50,000 for one accident compensation cannot exceed Rs. 10,000 per passenger if the vehicle is a motor cab and Rs. 5,000 in respect of any other vehicle. In this case, the vehicle involved in the accident is a motor cab which is defined in Section 2 (15) of the Motor Vehicles Act as any motor vehicle constructed, adapted or used to carry not more than six passengers excluding the driver, for hire or reward. The tourist taxi which was involved in the accident in this case, will definitely come under the said definition of 'motor cab'. Therefore, in view of the specific provisions contained in Section 95 (2) of the Motor Vehicles Act, the liability of the insure can be limited only to Rs. 10,000 for each individual passenger. In this case, the Tribunal has awarded a sum of Rupees 37,000, as against the insurer. This is contrary to the specific provision contained in Section 95 (2) (b) (ii) (4) of the Motor Vehicles Act. We have to therefore set aside that portion of the award which directs the insurance company to pay a sum of Rs. 37,000 to the claimants and instead direct the insurer to pay a sum of 10,000 to the claimants in this case which will be in accord with the statutory provisions in Section 95 (2) of the Motor Vehicles Act.
18. Both the appeals are, therefore, partly allowed to the extent indicated above, and the cross objections in both these appeals are dismissed. There will be no order as to costs in both the appeals.
19. Appeals partly allowed.