SUPREME COURT REPORTS

PUSHPABAI PURSHOTTAM UDESHI & ORS. .. . v.

RANJIT GINNING & PRESSING CO, (P) LTD. & ANR.

March 25, 1977

[M._ H. BEG, C.J. AND P. S. KAILASAM, J.]

!.fotor Vechicles Act 1939-S. 95, 110-Liability of insurance con1pany- Death of passenger not for reward-Quantum of compensation-Annual income if on the basis of basic wa?es.

Torts-Negligence-Ru ipso loquitur-Rash and negligent driving-Meaning of-Rationalae--course of employment-Scope of employment-If driler ghcs a lift without charging anything-If master liable-Vicario_us liability-Master and servant.

Purshottam Udeshi was travelling in a car which was driven by 1..Janager of the first respondent company. The car was insured with the second respondent.

The car dashed against a tree while proceeding fro°' Nagpur to Pandurna.

Purshottam, Viho was aged 58. years at that time, died in the accident. His annual income was about Rs. 9000/-. The widow and children of Purshottam fiied a claim for compensation for a sum of Rs. 1 1ac under section 110 of the

fotor Vehicles Act, 1939, before the Claims Tribunal. The respondents denied that the vehicle was driven in a rash or negligent manner and contended that the vehicle at the time of accident was perfectly in sound condition. It \\as

also contended that Pursbottam was travelling in the said vehicle on his ov.n responsibility and for his own purpose absolutely gratis and not on behalf of or at the instance of respondent No. 1 or the driver of the vehicle and, therefore, the claimants were not entitled_ to any compensation. The respondent pleaded inevitable accident.

The Tribunal found that the accident was as a result of negligent driving of the vehicle by the lanager. It also. found that the first respondent the owner of the company was liable to pay compensation to the claimants on account of negligence of their employee. The Tribunal awarded Rs. 31,209 /- as general damages on the basis of 5 years' earning less the amount which the deceased might have spent on himself and Rs. 2,000/- as special damages for funeral

and post-funeral expenses. The Tribunal took into account the pay, D.A., conveyance allowance etc. for the purpose of determining income of the deceased. Both the respondents filed appeals in the High Court. The IIigh Court did not decide the question as to whether the accident was due to rash and negligent driving or the quantum of compensation allowed by the Tribunal was -proper or not on the groundthat the respondent No. 1 cannot be held vicariously liable for the act of their tanager in taking Purshottam as a passenger as the said act was neither in the course of his employment nor under any authority whatsoever; that no evidence wa.9' led to show that the respondent No. 1 was aware that Purshottam was being taken in the car as a passenger by their 1-fanager. The High Court heldthat Purshottam was no better than a trespasser as far as respondent No. 1 is concerned and that, therefore, respondent No. 1 cannot be made vicariously Hable. .

Jn an appeal by certificate, the appellants claimants contended :

(1) That the accident was due to the rash and negligent driving of the

tanager of respondent No. 1.

(2) The accident took place during the course of the employment of the driver. ff Allowing the appeal,

lIELD : lll The car was being driven rashly and negligently. Although no eye \\itnes5 was examined P.W.I. the brother of the deceased \\rho went to the spot soon after the accident was examined.

He depcsed that the car dashed

., J

• k

PUSHPABAI v. RANJIT GINNING co; (Kai/asam, 1.) 373

•against a tree. The tree was on the right hand side of the road, 4 ft. away A from the right-hand side of the main metalled road. The road was 15_ft. wide '3.nd was a metalled road. On other side of the road there were fields at lower Jevel. The tree against vlhich the car dashed was uprooted about 9 to 10'' from the ground. The car dashed so violently that it was broken in the front $ide. The vehicle struck sO violently that the machine of the car went back about a foot from its original position~ The steering wheel o~ the engine of the car receded back on the driver's side and the said -impact on the driver's side and by the said impact the occupants died and front seat also moved back. u- "'Ihe witness was not cross-examined on these facts; The maxim of "Res i_P5a

loquitur" clearly applies in the present case~ In view of the proved facts tbl': burden was on the respondents to prove the inevitable accident. (376 B-H]

Eller v. Selfridge (1930) 46 T.L.R. 236, referred to.

The normal rule is that it is for the plaintiff to prove negligence but in some icases considerable hardship is caused to the plaintiff as the true -cause of the C -atcident is not known to him but is solely within the knowledge of the defendant Vlho caused it. The plaintiff can prove the accident but cannot prove how it happened to establish negligence on the part of the defendant.· Th.is hardship is sought to be avoided by applying the principle of res ipsa loquitur. It me.ans the accident "'speaks for itself' or "'tells its own story". The car could not ha Ye gone to the right extremity and dashed with such' violence with the tree if the driver had exercised reasonable -care and caution. The Court did not 1hink it necessary to remand the matter to the High Court to consider the question of rash and negligent driving since the evidence \\'as convincing. [377 D

DE, 378, A. EJ

(2) It is an admitted fact that the -driver of the car, the tanager of respondent No. 1, was proceeding from Nagpur to Pandhuma for purpose of delivering an amount of Rs. 20,000 /-. He was driving the car in the course of , the employment of respondent No. 1. It is now firmly established that the 1master's liability is based on the ground that the act is done in the scope or sourse of his employment or authority. (379 A-G]

Young v. Edward Box and Co. Ltd. (1951) I T.L.R. 789 at 793, approved.

• Sitaram MOtilal Kalal v. SantanupraSad ]aishankar Bhiitt (1966)3 SCR-.527; Conway v. George Wimpey & Co. Ltd. 1951 All E. R. 363 and 62 T.L.R. 458, distinguished.

Ormrod and Another v. Crosvilli Motor Services IJtd. (1953)2 All E.R. 753 and Canadian Pacific Railway Co. v.· Lockhart 1942 A.C. 591, referred to.

(3) The l\Ianager permitted Purshottamto .have a ride in the car; Taking into account the-highposition of the driver" who was the l\fanager'of the com- -iPany it is reasonable to presume in the absence of any evidence to the contrary the l\Ianager had authority to carry Purshottam or acting in .the course of his <>mployment. There is nothing to support the conclusion of the High Court that the driver _was no! acting in the course of his employment. (382 D-F]

Cox v. Midland Counties Ry. Co. (3 Ex. 268) and Honghton v. pi[kinRfon, {1912) 3 K.B. 308 distinguished. .

_ Twine v. Bean's Express, Ltd. 62 T.L.R~ p. 155, yCar 1945~6 distinguished.

. 4. RCcent trend in law is to make the master liabie' for acts which do not -strictly fall \\o'ithin the term "'in "the course of employment" as ordinarily under

stood. [3 83 Fl

5. The Hig:h Court did not go into the question of quantum of compen.- sation. The Tribcna1, however, ought not to have taken D.A., Conveyance H

• Allowance etc., into account for the purposes of detern1ining the income of the _ deceased.· Thus; the income of 5 "years would stand reduced from Rs. 31,000/-

to Rs. 25,500 /- over and above special damage of Rs. 2,000/-. [385 A, C-D]

SUPREME cou:n REPORTS

.[1977] 3 S.C.R.

6. As far as respondent No. 2 Insurance Co. is concerned it contended that since the Company had scifically limited its liability in respect of injurY to passengers to Rs. 15,000/- ii cannot be made liable for anything in excess of

Rs~ 15,000/-; The respondent No. 1 contended _that the insurance cover under the Act extended to the injury to the passengers also and relied on Section 95(1) (b)(i) which provides against any libility to the owner which may be incurred by him in respect of death or bodily injury to any person or damage to any person of a third party caused by or arising out of the use of the vehicle in a public place. Section 9 5 of the ~Iotor Vehicles Act as amended by Act 56 of 1969, is based on the Road Traffic Act of 1960 or

he earlier Act of 1930 in England. Section 95(a) and 95(b)(i) of the Act adopts the provisions of the English Road Traffic Act, 196.P. and exclude5 the liability of the Insurance Co. regarding the risk to the passengers. Section 95 provides that a policy of insurance must b: a policy which insures the persons '1.gainst any liability which may be incurred by him in respect of death or bodily injury to any person or damage to any property of a third party caused by or. arising out of use of the vehicle in a public place. Proviso_ 2 to Section 95(b) makes it clear that it is not required that a policy of insurance should 'cover risk of the passengers :who are not carried for hire or reward. Under section 95, the risk to a passenger in a vehicle who _is not carried for hire or reward is not required to be insured. The Insurer can howevr alv,:ays take policies for a risk which is not covered by section 95. In the present case, the insurer had insured with the Insurance Co. the risk to the passenger to the .extent of. Rs. 15,000/-. Clause 1 of the section 2 to the. Insurance Policy •"'hich requires the Insurance Co. to indemnify the insured in respect of , claimants' claim which becomes legally payable in respect of death of or bodily injury to any person is not happily worded.

However, since the said clause .talks of .. except so far as necessary to meet the requirements of section 9 5 of the 11otor Vehicles Act, 1939" would indicate that the liability is restricted .to the liability arising out of the statutory requirements under section 95. The policy read "'ith the other clauses makes it clear that the respondent no. 2 would be liable to the extent of Rs. 15,0001-: (385 G-H, 386 A, F, 387 B, H,

388 A-DJ .

CIVIL APPELLATE JURISDICTION : Civil Appeal No: 2071 of

1968. -·

(From the Judgment and Order dated 20-4-1967 of the Madhya Pradesh High Court in Misc. First Appeal No. 104/66). ·

Rameshwar Nath, for the appellants

F U. R. Lalit and A. G. Ratnaparkhi, for respondent No. 1.

Nau.nit Lal and Miss Lizlita Kohli, for.respondent No. 2.

The Judgment of the Court was delivered by

KAILASAM, J.-This is an appeal by certificate under Article 133 Cl )(a) of the Constitution granted by the High Court of Madhya Pradesh.

The appellants filed a claim for compensation of a sum of rupees one lakh under section 110 of the Motor Vehicles Act before the Claims Tribunal, Jabalpur. The first claimant is the wife and the claimants . 2 to 8 are the children of one Purshottam Tulsidas Udeshi who met with his death in a motor car accident on 18th December, 1960 when he was travelling in the car which was driven by Madhavjibhai Mathuradas Ved, the Manager of the first opponent company, M/s. Ranjit Ginning and Pressing Co. Private Ltd., in a rash and negligent manner near a village called Chincholi- Vad which was 16 miles from Saoner. The car which was a Hindustan Ambassador Saloon was insured with second opponent, Union

, 4

Fire Accident and General Insurance Co. Ltd.

The deceased was A aged 58 years at the time of his death and according .to the petitioners was earning annually about Rs. 9,000.

They claimed a compensation of rupe(,'S one lakh.

The opposite parties, the owner and the insurance company, opposed the claim.

While admitting that the vehicle was proceeding from Nagpur on its way to Pandhurna for the purpose mentioned by the applicants they denied that the vehicle was driven in a rash and negligent manner and pleaded that the vehicle B was at the time of accident in perfectly sound conition. It was submitted that the husband of the applicant No. 1 was travelling in the said vehicle on his own responsibility and for his own purpose and absolutely gratis and not on behalf of or at the instance of the opposite 'party No. 1, or 'the driver of the vehicle and therefore the claimants are not entitled to any compensation.

The opposite parties pleaded that the incident was as a result of inevitable accident and C not due to any act of rashness or negligence on the part of the driver.

They opposed the claim of the compensation as highly exaggerated.

The Motor Accidents Claims Tribunal, Jabalpur, found that the accident of the motor vehicle was as a result of negligent driving of the vehicle by the Manager, Madhavjibhai Mathuradas Ved, the driver of the vehicle, It also found that the first respondent, the owner of D the company, is liable to pay compensation to the claimants on account of the negligence of their employee Madhavjibhai which caused the death of Purshottam Tulsidas Udeshi.

Regarding the compensation payable the Tribunal fixed Rs. 31,209.15 as general damages in addition to Rs. 2,000 as special damages for funeral and post-funeral ex, penses.

The owner, first opponent, preferred an appeal to the High Court impleading the claimants and the insurance com- E pany as respondents against the award passed by the Claims Tribunal.

The High Court did not decide the question as to whether the accident was due to the rash and negligent driving or the quantum of compensation to which the claimants were entitled to as it allowed the appeal by the owner on the ground that the owner cannot be held vicariously liable for the act of Madhavjibhai in taking Purshottam as a passenger as the said act was neither in the conrse of his F employment nor under any authority whatsoever and that there was no evidence that the owners of the vehicle were aware that Purshottam was being taken in the car as a passenger by their Manager, Madhavjibhai.

Holding that so far as the owners are concerned Purshottam was no better than a trespasser the High Court held that the owners were not vicariously liable.

On an application by the claimants the High Court granted a certificate and thus this appeal G has come before this Court. "'!

The qnestions that arise for consideration are whether on the facts of the case the claimants have established (1) that the accident was due to the rash and negligent driving of Madhaviibhai Mathuradas Ved, the Manaer of the company, and (2) whether the incident took place during the conrse of the employment of the driver.

In H the event the claimants succeed on these two points the amount of compensation to which they are entitled would have to be determined.

t\ The High Court relying on three decisions in Sitaram Motilal Kalal v. Santanuprasad Jaishankar Bhatt('), Canadian Pacific Railway Company v. Leonard Lockhart(2), and Conway v. George Wimpey & Co. Ltd.("), came to the conclusion that the rash and negligent driving by the Manager was not in the course of his employment.

The learned counsel for the respondent relied on some other decisions which will be referred to in due course.

The High Court has not gone into the question as to whether the car was. being driven rashly and negligently by the owner's employee as it held that the act was not in the course of bis employment.

We feel that the question as to whether the car was being driven ra'shly and negligently would have to be decided on the facts of the case first for, if the claimants fail to establish rash and negligent act no other question would arise. We would therefore proceed to deal with this question first.

The claimants did not lead any' direct evidence as to how the accident occurred.

No eye-witness was examined.

But P.W. 1, the younger brother of the deceased Purshottam Udeshi, who went to the spot soon after the accident was examined.

He stated that he went with one of his relatives and an employee of his brother's employer and saw that the car had dashed against a tree while proceeding fr(lm Nagpur. to Pandurna.

The tree was on the right hand side of the road, fonr feet away from the right hand 'side of the main metalled road.

The vehicle will have to proceed on the left hand side of the road.

The road was 15 feet wide and was a straight metalled road.

On either side of the road there were fields.

The fields were of lower level.

The tree against which the car dashed was uprooted about 9 to 10 inches from the ground.

The car dashed so heavily that it was broken in the front side.

A photograph taken at that time was also filed.

According to the witness the vehicle struck so heavily that the machine of the car from its original position went back about a foot.

The steering wheel and the engine of ihe car receded back on driver's side and by the said impact the occupants died and front seat also moved back. The witness was not cross-examined on what he saw about the state of the car and the tree. It was not suggested to him that the car was not driven in a rash and negligent manner. In fact there is no cross-examination on the aspect of rash and negligent driving.

The Claims Tribunal on this evidence found that "it was admittedly a mishap on the right side of the road wherein the vehicle had dashed against a tree beyond the pavement so violently as not only to damage the vehicle badly but also entailing death of its three occupa11ts, maxim 'res ipsa loquitur' applies (See Ellor v. Selfridge [1930], 46 T.L.R. 236)". The Tribunal proceeded to discuss the evidence of P.W. 1 and found on the evidence that it cannot help concluding that the dashing of the car against the tree was most violent and that it was for the respondents to establish that it was a case of inevifable accident.

They have led no evidence. It may at once be stated that though the opposite parties had pleaded that this is a case of inevitable accident they have

(2) A.LR. 1943 P.C. 63.

(3) [19511 I A.E.R. 363.

~ ..

not led any evidence to establish their plea. The burden resfs on the opposite party to prove the inevitable accident.

To succeed in such a defence the opposite party will have to establish that the cause of the accident could not have been avoided by exercise of ordinary care and caution. "To establish a defence of inevitable accident the defendant must either show what caused the accident and that the result was inevitable, or he mu'st show all possible causes, one or more of which produced the effect, and with regard to each of such possible causes he must show that the result could not have been avoided." (Halsbury's Laws of England, Third Ed., Vol. 28, p. 81). No such attempt was made and before us the plea of inevitable accident was not raised.

We have therefore to con.sider whether the claimants have made out a case of rash and negligent driving.

As found by the Tiibunal there is no eye-witness and therefore the question is whether from the facts established the case of rash and negligent act could be inferred.

The Tribunal has applied the doctrine of "resipsa-loquitur". It has to be ccins; dered whe:her under the circumstances the Tribunal was justified in applying the doctrine.

The normal rule is that it is for the plaintiff to prove negligence bu( as in some cases considerable hardship is caused to the plaintiff as the true cause of the accident is not known to him but is. solely within the knowledge of the defendant who caused it, the plaintiff can prove the accident but cannot prove how it happened to establish negligence on the part of the defendant This hardship is sought to be avoided by µpplying. the principle of res ipsu luquitur.

The general purport of the words res ipsa loquitur is that the accident "speaks for itself" or tells its own story.

There are cases in which the accident speaks for itself so that it is sufficient for the plaintiff to prove the accident and nothing more.

It will then be for the defendant to establish that the accident happened due to •ome other cause that his own negligence.

Salmond on the Law of Torts (15th Ed.) at p. 306 states : "The maxim res ipsa loquitur applies whenever it i's

so improbable that such an accident would have happened without the negligence of the defendant that a reasonable jury could find without further evidence that it was so caused." In Halsbury's Laws of England, 3rd Ed., Vol. 28, at p. 77, the position is stated thus : "An exception to the general rule that the burden of proof of the alleged negligence i's in the first instance on the plaintiff occurs wherever the facts already established are such that the proper and natural inference arising from them is that the injury complained of was caused by the

<lefendant's negligence, or where the event charged as negligence "tells its own story' of negligence on the part of the defendant, the story so told being clear and unambiguous." Where the maxim is applied the burden Is on the defendant to show either that in fact ne was not negligent or that the accident might moreprobably have happened in a manner which did not connote negligence on his part.

For the application of the principle it must be shown that the car was under the management of tile defendant and ihat the accident is such as in ordinary course of things does not happen if those who had the management used proper care.

Applying the principles stated above we have to see whether the requirements of the principle

have been sati'sfied.

There can be no dispute that the car was under the management of the company's manager and that from the facts. disclosed by P. W. 1 if the driver had used proper care in the ordinary course of things the car could not have gone to the right extreme of the road, dashed against a tree and moved it a few inches away. The learned counsel. for the respondents submitted that the road is a very narrow road of the width of about 15 feet on either side of which were fields and that it is quite probable that cattle might have strayed into the road suddenly causing the accident.

We are unable to accept the plea for in a country road with a width of about 15 feet with fields on either side ordinary care requires that the car should be driven at a speed in which it could be controlled if some stray cattle happened to come into the road.

From the description of the accident given by P.W. 1 which stands unchallenged the car had proceeded to the right extremity of the road which is the wrong side and dashed against a tree uprooting it about 9 inches from the ground.

The car was broken on the front side and the vehicle struck the tree so heavily that the engine of the car was displaced from its original position one foot on the back and the steering wheel and the engine of the car had receded back on the driver's side.

The car could not have gone to the right extremity and dashed with such violence on the tree if the driver had exercised reasonable care and caution.

On the facts made out tlie doctrine is applicable and if is for the opponents to prove th:i\ the incident did not take place due to their negligence.

This they have not even attempted to do.

In the circumstances we find that the Tribunal was justified in applying the doctrine.

It was submitted by the Learned counsel for the respondents that as the High Court did not consider the question this point may be remitted to the High Court.

We do not think it necessary to do so for the evidence on record is convicing to prove the case of rash and negligent driving set up by the claimants.

The 'second contention that was raised by the counsel for the appellants is that the High Court was in error in holding that the incident did not take pJa:ce in the course of the employment or under the authority of the company.

The High Court found that there is no evidence that the owner of the vehicle was aware that Purshottam was being taken in !lie car as a passenger by Madhavjibhai and in the circumstances the owner cannot be held liab1e for the tortious act of the servant.

The High Court found that the car was going from Nagpur to Pandhurna on the business of the company and it may also be that Madhavjibhai, the Manager of the owner's car, was also going on the business of the owner and it may also be that he had implied authority to drive the vehicle.

Having agreed with the contentions of the claimants so far the High Court came to the conclusion that there were no pleadings or material on record to establish that Purshottam was travelling in the vehicle either on some business of the owner of the vehicle or under any ostensible authority from them to their manager Madhavjibhai lo take Purshottam as a passenger in the vehicle.

Before dealing with the right of Purshottam as a passenger, we will consider the question whether the

accident took r>lace during the course of the employmenf of Madhav- A jibhai by the company. It is admitted in the written statement by the owner that Madhavjibhai was the Manager of opposite party No. 1 and that the vehicle was proceeding from Nagpur on its way to Pandhuma for purpose of delivering an amonnt of Rs. 20,000 to the Ginning and Pressing factory at Pandhurna. The Tribunal found on the pleadings that Madhavjibhai was the emp!Oyee of the company and during the course of employment oy driving the motor car B he negligently caused the death of Purshottam.

The High Court also confirmed the findings and found that Madhavjibhai, the Mana- ., ger of the ownr of the car, was going on the business of the said owner and that it may be that the Manager had the implied authority to drive the vehicle.

On such a finding which is not disputed before us, it is difficult to resist the conclusion that the accident was due to the negligence of the servant in the course of his employment and C that the master is liable. On the facts found the law is very clear but as the question of the company's liability was argued at some length we will proceed to refer to the law on the subject.

It is now firmly established that the master's liability is based on the ground that the act is done in the scope or course of his employ- D ment or authority. The position was stated by Lord Justice Denning in Young v. Edward Box and Co. Ltd.(1). The plaintiff and fellow workmen were given a lift on one of the defendants' lorries with the consent of his foreman and of the driver of the lorry. On a Sunday evening the plaintiff, in the course of that journey, was injured by the negligence of the driver of the lorry and the plaintiff brought an action against the defendants claiming damages for his injuries. The defence E was \hat the plaintiff, when on the lorry, was a trespasser. The traffic manager of the defendants pleaded that he had never given instructions to the foreman that he should arrange for lifts being given to the plaintiff and his fellow-workmen on Sundays and that the foreman had no authority to consent to the plaintiff's riding on the lorry.

While two learned Judges held that the right to give the plaintiff leave to ride on the lorry was within the ostensible authority of the foreman, and F that the plaintiff was entitled to rely on that authority and in tha~ respect was a licensee, Lord Denning held that although the plaintiff, when on the lorry, was a trespasser, so far as the defendants were concerned, the driver was acting in the course of his employmen't in giving the plaintiff a lift and that was sufficient to make the defendants liable and that he did not base his judgment on the consent of \he foreman. Lord Justice Denning stated the position thus : G

" .... the first question is to see whether the servant was liable. lf the answer is Yes, the second question is to see whether the employer must shoulder the servant's liability.

So fa~ as the driver is concerned, his liability depends on whether the plaintiff was on the lorry with his consent or not. XXXXX.

(I) (1951) I T.L.R. 789 at 793.

The next question is how far the employers are liablo for their servant's conduct. In order to make the employers liable to the passenger it is not sufficient that they should be liable for their servant's negligence in driving.

They must also be responsible for his conduct in giving the man a lift.

If the servant has been forbidden, or is unauthorised, to give anyone a lift, then no doubt the passenger is a trespasser on the lorry so far as the owners are concerned; but that is not of itself au 'answer to the claim. XX X X X In my opinion, when the owner of a lorry sends his servant on a journey with it, thereby putting the servant in a position, not only to drive it, but also be give people a lift in it, then he is answerable for the manner in which the servant conducts himself on the journey, not only in the driving of it, but also in giving lifts in it, provided, of course, that in so doing the servant is acting in the course of his employment."

Lord Justice Denning concluded by observing that the passenger was therefore a trespasser, so far as the employers were concerned; but nevertheless the driver was acting in the course of his employment, and that is sufficient to make the employers liable. It will thus be seen that while two of the learned Judges held that the right to give the plaintiff leave to ride on the lorry was within the ostensible authority of the foreman and the plaintiff was entitled to rely on that authority as a licensee, Lord Denning based it on the ground that even though the plaintiff was a trespasser so far as the defendants were concerned, as the driver was acting in the course of his employment in giving the plaintiff a lift, it was sufficient to make the defendants liable. Applying the test laid down there can be no difficulty in concluding tha; t the right to give leave to PurshoHam to ride in the car was within the ostensible authority of the Manager of the company who was driving the car and that the Manager was acting in the course of his employment in giving lift to Purshottam. Under both the tests the respondents would be liable.

We will now refer to the three cases relied on by the High Court for coming to the conclusion that the accident did not take place during the course of employment. The first ease referred to is Sitarani Motikil Kalal v. Santanuprasad Jaishankar Bhatt('). The owner of a vehicle entrusted it to A for plying it as a taxi. B who used to clean the taxi was either employed by the owner or on his behalf by A. A trained B to assist him in driving the taxi and took B for obtaining a licence for driving.

While taking the test B caused bodily injury to the respondent. A was not present in the vehicle at the time of the accident. On the question whether the owner was liable the majority held the view that the owner was not liable. On the facts the court found that the person who had borrowed the taxi for taking out a licence and the driver who lent the same was not &Cling in the course of his business. The court on an application of the test laid down in various decisions held that there is no proof that the second defendant, the driver, was authorized o coach the cleaner so that the cleaner

(1) (1966] 3 S.C.R. 527.

PUSHPABAI v. RANJ!T GINNING co. (Kailasam, /.) 3 81

might become a driver and drive the taxi and that it appeared more probable that the second defendant wanted someone to assist him in driving the taxi for part of the time and was training the third defendant to shart< the ta.sk of driving.

The owner"s plea that it had not given any such authority was accepted by the court. Holding that it had not been provecl that the act was impliedly authorized by the owner or to come within any of the extensions of the doctrine of scope of employment the court held that the owner is not liable. This Court has held that the test is whether the act was done on the owner's business or that il was proved to have been impliedly authorized by the owner. At page 537 it is stated that the law is settled that master is vicariously liable for the acts of his servants acting in the course of his employment. Unless the act is done in the course of employment, the servant's act does not make the employer liable. In other words, for the master's liability to arise, the act must be a wrongful act authorized by the master or a wrongful and unauthorized mode of doing some act authorised by the master.

The extension of the doctrine of the scope of employment noticed in the judgment refers to the decision of Ormrod and Another v. Crosville Mawr Services Ltd., and Another( 1), where Lord Denning stated : "It has often been supposed that the owner of a vehicle is only liable for the negligence of the driver if that driver is his servant acting in the course of his employment.

This is not correct. The owner is also liable if the driver is, with the owner's consent, driving the car on the owner's business or for the owner's purposes." The Supreme Court accepted the test and to that extent this may be taken as an extension of the doctrine of scope of employment.

Thus, on the facts as we have found that the accident took place during the course of employment the decision in Sitaram Motilal Kalal is of no help to the respondents.

The next case which is referred to by the High Court is Canadian Pacific Railway Company v. Lockhart('). In that case one S was employed as a carpenter by the railway company. In the course of his employment he was required to make repairs of various kinds to employer's property. He made a key for use in a lock in the station at N far away from his headquarters at W.

He was paid per hour and the railway company kept vehicles to be used by S available for him.

S, however, had a car of his own and without communicating his intention to anyone he used it on his way to N.

An accident happened on the way owing to S's negligence. It was also in evidence that the railway company had issued notice to its servants particularly to S warning him against using their private cars unless they had got their cars insured agains't third party risk.

On the facts, the Privy Council held that the means of transport used by the carpenter was clearly incidental to execution of that for which he was employed. As what was prohibited was not acting as a driver but using a non-insured car, the prohibition merely limited the way in which the servant was to execute the work which he was employed to do and that breach of the prohibition did not exclude the liability of the master to third party. We do not see how this case would help the respondents. On

(I) (1953) 2 All. E.R. 753.

(2) (1941) A.C. 591.

A the other hand it supports the contention of the counsel for the appellants that when the Manager was driving the car for the purpITTeS of the company it was in the course of his employment.

The third case that is referred to by the High Court is Conway v.

George Wimpey & Co. Ltd.('). The defendants, a firm of contractors, were engaged in building work at an aerodrome, and they provided lorries to convey their employees to the various places of their work on the site.

Jn the cab of each lorry was a notice indicating that the driver was under strict orders not to carry passengers other than the employees of the defendants during the course of, and in connection with, their employment, and that any other person travelling on thEO, vehicle did so at hi~ own risk. Further the driver of the Jorry had received clear oral instructions prohibiting him from taking other persons.

The plaintiff who was employed as a labonrer by anothen firm of contractors at the aerodrome, while on his way to work, was permitted by the driver to ride on one of the defendants' lorries for some distance across the aerodrome and while dismounting the plaintiff was injured owing to driver's negligence. The court held that on the facts of the case the taking of the defendants' employees on the vehicle was not merely a wrongful mode of performing an act of the class which the driver in the prese1't case was employed to perform but was the performance of al\ act of a class which he was not employed to perform at all.

The facts stated above are entirely different from those. which arise in the present case before us as in the case before the Court of Appeal(') there was a notice indicating that the driver was under strict orders not to carry passengers and the driver was instructed not to carry others while in the present case a responsible officer of the company, the Manager, had permitted Purshottam to have a ride in the car. Taking into account the high positiQn of the driver who was the Manager of the company, it is reasonable to presume, in the absence of any evidence to the contrary, that the Manager had authority to carry Purshotam and was acting in the course of his employment.

We do not see any support for the conclusion arrived at by the High Court that the driver was not acting in the course of his employment.

We will now procee<X to refer to some cases which were cited by the learned counsel for the respondents. The learned counsel placed reliance on the decision in Houghton v. Pilkington.(') In that case the plaintiff at the request nf a servant of the defendant got into the defendant's cart which was then in the chrage of 'the servant, in order to render assistance to another servant of the defendant who had been rendered unconscions by an accident. The plaintiff fell out of the cart and was in jnred through the negligence of the servant in charge of the cart in causing the horse to start.

Jn an action against the defendent for damages for the injnries sustained by the plaintiff it was held that the existence of an emergency gave no implied authority to the servant to invite the plaintiff into the cart and that the defendant was not liable

(I) (1951) (!) All. E.R. 363.

(2) 62 T.LR. 458.

(3) (1912) 3 K.B. 308.

to ihe plaintiff. Justice Bankes while agreeing with Justice Bray who A delivered the leading judgment expressed his view that the lower court had taken the view that an emergency had arisen which gave the defendant's servant implied authority to invite the plaintiff into the cart for the purpose of rendering assistance to the injured boy.

The learned Judge was first inclined to agree with that view but because of the case being governed by Cox v. Midland Counties Ry. Co. (3 Ex. 268) he felt he could not consistently with that decision hold that in the B circumstances the driver of the cart had any implied authority to invite the plaintiff to get into the car. The facts in Houghton v. Pilkington are entirely different and the decision was based on the ground that existence of the emergency did not confer on the driver of the cart authority to invite the plaintiff into the cart. ·

The next case thait was cited by the learned counsel for the respondents was Twine v. Bean's Express, Limited('). The defendants provided for the use of a bank a commerciail van and a driver on the terms that the driver remained the servant of the defendants and that the defendants accepted no responsibility for injury suffered by persons riding in the van who were not employed by them.

There were two notices on the van, one stating that no unauthorized person was allowed on the vehicle. and the other that driver had instructions not to a!low unauthorized travellers in the van, and that in no event would the de- . fendants be responsible for damage happening to them.

One T who "!as not authorized to ride in the van got a, lift in the van with the consent of the driver. Owing to the negligence of the driver the accident occurred and T was killed.

The contention tha't the accident arose while the driver was engaged on a duly authorized journey was negatived and it was held that defendants owed no duty to T to take care. This case was taken up on appeal which confirmed the view of thel trial court holding that the driver in giving the lift to T was clearly not acting within the s_cope of his employment and his employers were consequently not liable. The facts are totally different. The learned counsel for the respondents was not able to produce any authority which. would support his contention that on the facts of the case found, the company should not be held liable.

Before we conclude, we would like to point out that the recent trend in law is to make the master liable for acts which do not strictly fall within the term "in the course of the employment" as ordinarily understood.

We have referred to Sitaram Motilal Kalal v. Santanuprasad Jaishankar Bhat (supra) where this Court accepted the law laid down by Lord Denning in Ormrod and Another vs. Crosville Motor Services Ltd. and Another (supra) that the owner is not only liable for the_ negligence of the driver if that driver is his servant acting in the course of his employment but also when the driver is, with the owner's consent, driving the car on the owner's business or for the owner's purposes. Ti1is extension has been accepted by this Court. The law as laid down by Lord Denning in Young v. Edward Box and Co. Ltd. already referred to i.e. the first question is to see whether the servant is liable

(I) 62 T.L.R. p. 155, year 1945-56.

!0-436SCI/77

and if the answer is yes, the second question is to see whether the em- !oyer must shoulder th_e servant's liability, has been uniformally accepted as stated in Salmond Law of Torts, 15th Ed., p. 606, in Crown Proceedings Act, 194 7 and approved by the House of Lords in Staveley Iron & Chemical Co. Ltd. v. Jones(') and I.C.l. Ltd. v. Shatwell(').

The scope of the course of employment has been extended in Navarro

v. Moregrand Ltd. & Anr(3 ) where the plaintiff who wanted to acquire the tenancy of a certain flat, applied to the second defendant, a person with ostensible authority to conduct the business of letting the particular flat for the first defendant, the landlord. The second defendant demanded from the plaintiff a payment of £225 if he wanted the flat and the plaintiff paid the amount. The plaintiff sought to recover the sum from the landlord underthe Landlord and Tenant (Rent Control) Act, 1949. The Court of Appeal held that the mere fact that the second defendent was making an illegal request did not constitute notice to the plaintiff that he was exceeding his authority and that, though the second defendant was not acting within his actual or ostensible authority in asking for the premium, as the landlord had entrusted him with the Jetting of the flat, and as it was in the very course of conducting that business that he committed the wrong complained of he was acting in the course of his employment. Lord Denning took the view that though the second defendant was acting illegally in asking for and receiving a premium and had no actual or ()Stensible authority to do an illegal act, nevertheless, he was plainly acting in the course of his employment, because his employers, the landlords, had entrusted him with the full business of letting the property, and it was in the very course of conducting that business that he did the wrong of which complaint is made.

This decision has extended the scope of acting in the course of employment to inc1ude an illegal act of asking for and receiving a premium though the receiving of the premium was not authorized. We do not feel called upon to consider whether this extended meaning should be accepted by this Court. It appears Lord Goddard, Chief Justice, had gone further in Barker v. Levinson(<) and stated that "the master is responsible for a criminal act of the servant if the ad is done within the general scope of the servant's employment." Lord Justice Denning would not go to this extent and felt relieved to find that in the autho-- rized Law Reports (1951) 1 K.B. 342, the passage quoted above was struck out. We respectfully agree with the view of Lord Denning that the passage attributed to Lord Chief Justice Goddard went a bit too far.

On a consideration of the cases, we confirm the law as laid down by this Court in Sitaram Motilal Kalal, v. Santanuprasad Jaishankar Bhatt (supra) and find that_in this case the driver was acting in the course of his employment and as such the owner is liable. We therefore set aside the finding of the High Court that the act was not committed in the course of employment or under the authority of the master, and allow the appeal.

(1) (1956) A.C. 627.

(2)(1965) A.C. 656.

(3) (1951) 2 T.L.R. 674.

(4) 66 The Times L.R. (Pt. 2) 717.

' •

. ~

The only point that remains is the determination of the quantum of compensation to which th~ appellan.ts ar~ entitled to.

Te J; Iigh Com; t did not go into this question but tlie Tnbunal aer taking mto consideration the various facts fixed the compensatron at Rs. 33,209.15 with costs and directed that the insurance company shall fndemnify the owner to the extent of Rs. 15,000. The Tribunal fixed special damages for funeral and post-funeral expenses including transport charges at Rs. 2,000. This item is not disputed. The second item is a sum of Rs. 31,209.15 which according to the Tribunal would have been the amount which the deceased would have earned by continuing to work for a period of 5 years. The Tribunal accepted the documents produced by the claimants regarding the income of the deceased and fixed it at Rs. 9,316.83 per annum. Out of this amount the Tribunal rightly excluded a SUII! of Rs. 1,875 which is the bonus the deceased would have got as it cannot be taken into account and fixed the net amount of earning at Rs. 7,441.83 per year and Rs. 37,209.15 for 5 years.

After deducting Rs. 6,000 which the deceased might have spent on himself the Tribunal arrived at a figure of Rs. 1,209 .15 under this head. The learned counsel for the respondents referring to item No. 27 pointed out that the pay of the deceased was only Rs. 425 per month and that the Tribunal was in error in including the dearness allowance, conveyance allowance and other expenses and that the income of the deceased should have been taken as only Rs. 425 per month.

The learned counsel for the appellants accepts this figure.

Taking Rs. 425/- being the monthly income the annual income totals up to Rs. 5,100/- . and for 5 years to R, s. 25,500/-. Adding to this Rs. 2,000/- which was given as special damages the total amount will come to Rs. 27,500/-. We accept this calculation as correct and restore the award passed by the Claims Tribunal but restrict it to an amount of Rs. 27,500/-.

As the Union Fire Accident & General Insurance Co. Ltd., Paris, carrying on business at Nagpur bas been nationalised, though the second respondent before the Tribunal was represented by a counsel, we directed notice to the nationalised insurance company so that they would also be heard. ·

The nationalised insurance company has taken notice and appeared through Mr. Naunit Lal, advocate. The insurance company bad nothing further to add except as to the quantum of liability of the insurance company so far as injuries to the passengers are concerned.

Mr. Naunit Lal submitted that the scope of the statutory insurance does not cover the injury suffered by the passengers and as the owner has specifically insured under the insurance policy the risk to passengers to the extent of Rs. 15,000 only the liability of the insurance company should be limited to Rs. 15,000. On behalf of the owner it was submitted that the insurance cover under the Act extended to the injury to the pssengers also a; id soght to upport his contention y referrmg to sectron 95(1){b)(1) which proVIdes against any liability to the owner which may be incurred by him in respect of 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 the vehicle in a public place.

As section 95 of the Motor Vehicles Act, 1935 as amended by Act 5 6 of 1969 is based on the English Act it is useful to refer to that.

Neither the Road Traffic Act, 1960, or the earlier 1930 Act required users of motor vehicles to be insured in respect of liability for death or bodily injury to passengers in the vehicle being used except a vehicle in which passengers were carried for hire or reward or by reason of or in pursuance of a contract af employment. In fact, sub-section 203 ( 4) of the 1960 Act provided that the policy shall not be required to cover liability in respect of death of or bodily injury to persons being carried in or upon, or entering or getting on to or alighting from, the vehicle at the time of the occurrence of the event out of which the claims arise.

The provisions of the English Act being explicit the risk to passengers is not covered by the insurance policy.

The provisions under the English Road Traffic Act, 1960, were introduced by the amendment of section 95 of the Indian Motor Vehicles Act. The law as regards general exclusion of passengers is stated in Halsbury's Laws of England, Third Edition, Vol. 22, at p. 368, para 755 as follo\'(S :-

"Subject to certain exceptions a policy is not required to cover liability in respect of the death of, or bodily injury to, a person being carried in or upon, or entering or getting into or alighting from, the vehicle at the time of the occurrence of the event out of which the claim arises."

It is unnecessary to refer to the subsequent development of the English law and as the subsequent changes have not been adopted in the Indian statute.

Suffice it to say that the Motor Vehicle (Passenger Insurance) Act, 1971, made insurance cover for passenger liability compulsory by repealing paragraph (a) and the proviso of sub-section 203 ( 4). But this Act was repealed by Road Traffic Act, 1972 though under section 145 of 1972 Act the coming into force of the provisions of Act 1971 covering passenger liability was delayed under December 1, 1972. ( vide Bingham's Motor Claims Cases, 7th Ed., p. 704).

Section 95(a) and 95(b)(i) of the Motor Vehicles Act adopted the provisions of the English Road Traffic Act, 1960, and excluded the liability of the insurance company regarding the risk to the passengers. Section 95 provides that a policy of insurance must be a policy which insures the persons against any liability which may be incurred by him in respect of death or bodily 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 place. The plea that the words "third party"

are wide enough to cover all persons except the person and the insurer is negatived as the insurance cover is not available to the passengers made clear by the proviso to sub-section which provides that a policy shall not be required

"(ii) except where the vehicle is a vehicle in which passengers are carried for hire or reward or by reason of or in pursuance of a contract of employment, to cover liability in respect of the death of or bodily injury to persons being

carried in or upon or entering or mounting or alighting from A the vehicle at the time of the occurrence of the event out of which a claim arises."

Therefore it is not required that a policy of insurance should cover risk to the passengers who are not carried for hire or reward. As under section 95 the risk to a passenger in a vehicle who is not carried for hire or reward is not required to be insured the plea of the B counsel for the insurance company will have to be accepted and the insurance company held not liable nnder the requirements of the Motor Vehicles Act.

The insurer can always take policies covering risks which are not covered by the requirements of section 95. In this case the insurer had insured with the insurance company the risk to the passen- C gers.

By an endorsement to the policy the insurance company had insured the liability regarding the accidents to passengers in the following terms :

"In consideration of the payment of an additional premium it is hereby understood and agreed that the Company undertakes to pay compensation on the scale provided below D for bodily injury as hereinafter defined sustained by any passenger ............ "

The scale of compensation is fixed a( Rs. 15,000. The insurance company is ready and willing to pay compensation to the extent of Rs. 15,000 according to this endorsement bnt the learned counsel for the insured submitted that the liability of the insurance company is E unlimited with regard to risk to the passengers.

The counsel relied on Section II of the Policy which relates to liability to third parties.

The clause relied on is extracted in full :

"Section II-Liability to Third Parties.

1. The Company will indemnify the isured in the event of accident caused by or arising out of the use of the Motor Car against all sums including claimant's costs and expenses which the insured shall become legally liable to pay in respect of

(a) death of or bodily injury to any person but except so far as is necessary to meet tlie requirements of Section 95 of the Motor Vehicles Act, 1939, the Company shall not be liable where such death or injury arises out of and in the course of the employment of such person by the insured."

It was submitted that the wording of clause 1 is wide enough to cover

all risks includwg injuries to passengers.

The clause provides that the Company will indemnify the insured against all sums including c_laimant's osts an~ expenses which the insured shall become legally H liable. This accordmg to the learned counsel would include legal liability to pay for risk to passengers. The legal liability is restricted to

clause 1 (a) which states that the indemnity is in relation to the legal liability to pay in respect of death of or bodily injnry to any person but except so far as is necessary to meet the requirements of section 95 of the Motor Vehicles Act. The Company shall not be liable where such death or injury arises out of and in the conrse of the employment of such person by the insured. Clause 1 and 1 (a) is not very clearly worded but the words "except so far as is necessary to meet the requirements of Section 95 of the Motor Vehicles Act, 1939," would indicate that the liability is restricted to the liability arising out of the statutory requirements under section ~5. The second part of clause 1 (a) refers to the non-liability for injuries arising in the conrse of employment of such person. The meaning of this sub-clause becomes clear when we look to the other clauses of the insurance policy.

The policy also provides for insurance of risks which are not covered under section 95 of the Act by stipulating payment of extra premium. These clauses would themselves indicate that what was intended to be covered under clause 1 and 1 (a) is the risk required to be covered under section 95 of the Motor Vehicles Act.

On a construction of the insurance policy we. accept the pfoa of the insurance company that the policy had insured the owner only to the extent of Rs. 15,000 regarding the injury to the passenger.

In the result we hold that the liability of the insurance company is restricted to Rs. 15,000. There shall be a. decree in favour of the claimants appellants to the extent of Rs. 27,500 against the respondents out of which the liability of the insurance company will be restricted to Rs. 15,000. The appeal is allowed with the costs of the appellant which will be paid by the respondents in eqnal share.

P.H.P.

Appeal allowed. 7

PUSHPABAI PURSHOTTAM UDESHI & ORS

M._ H. BEG, C.J.

P. S. KAILASAM, J.

Vechicles Act 1939

S. 95, 110

Purshottam Udeshi

Janager

Nagpur

Pandurna

Purshottam

section 110

Vehicles Act, 1939

Pursbottam

IIigh Court

Vlho

Pandhuma

Purshottamto

[1977] 3 S.C.R.

6

Section 95(1)

Section 9

Iotor Vehicles Act as amended by Act

England

Section 95(a) and 95(b)(i)

Section 95

Section 95(b)

section 95

section 95

Clause 1

section 2

section 9

Vehicles Act, 1939

section 95

Rameshwar Nath

U. R. Lalit

A. G. Ratnaparkhi

Nau.nit Lal

Lizlita Kohli

KAILASAM

Article 133

High Court of Madhya Pradesh

section 110

Motor Vehicles Act

Claims Tribunal, Jabalpur

Purshottam Tulsidas Udeshi

18th December, 1960

Madhavjibhai Mathuradas Ved

Chincholi- Vad

Saoner

Pandhurna

Madhavjibhai

Madhaviibhai Mathuradas Ved

Salmond

Madhav- A jibhai

Denning

Denning

PurshoHam

(1966] 3 S.C.R. 527

Supreme Court

Sitaram Motilal Kalal

Purshotam

Bankes

Bray

Crown Proceedings Act

Goddard

s. 25

Naunit Lal

section 95

Motor Vehicles Act, 1935

Neither the Road Traffic Act, 1960

section 203

section 95

Motor Vehicles Act

section 203

section 145

December 1, 1972

Bingham

Section 95(a) and 95(b)(i)

Section 95

section 95

Motor Vehicles Act

section 95

Section 95

Motor Vehicles Act, 1939

clause 1

clause 1

section 95

Motor Vehicles Act

Clause 1

Section 95

Motor Vehicles Act, 1939

clause 1

section 95

clause 1

section 95

Motor Vehicles Act


M. V. KURIAKOSE

THE STATE OF KERALA AND OTHERS

March 25, 1977

38 9

[M. H. BEG, C.J., A. C. GUPTA AND P. S. KAILASAM, JJ.]

Constitution of India, Article 16(1), whether attracted by violauon of ights claimed under agreenient or award-Article 32, whether re1nedy extends to the violation of such righ!s.

The appellant was a mechanic in the service of the erstwhile Transport .Department of the Kerala State. He thereafter became an employee of the J(erala State Transport Corporation when the same was set up in 1-farch, 1965.

Jn 1968, there wa" a settlement between the Corporation and its employees

providing that a 'trade test' would have to be passed for promotion to posts-in C the higher grade while "grade promotions" \vould take place upto the post of Assistant Cbargeman.

Subsequently, in a dispute referred to arbitration, the A\vard provided that category-wise seniority, together with trade-test should .determine the promotions. The petitioner alleged that thereafter, the Corpora- , tion and the workmen agreed to promotions in his wing by seniority alone and consequently, the petitioner and some others were promoted. Their promotions 1Were assailed as violative of the award, and were set aside by the lligh Court.

The petitioner filed a writ petitiOn under Art. 32 of the Constitution clain1ing D that his fundamental right under Art. 16(,1) had been violated.

Dismissing the writ petition the Court,

1 HELD : The rights of the petitioner under an agreement or an award, if he had any such right, could not be identified with rights under Article 16 (I) .of the Constitution. The result of the quashing of the promotion order relat- .ing to a whole category of employees in the position of the petitioner was that .all similarly situated shared the same fate .and alL those in the petitioner's cate- E .gory and with his qualifications had been pla<:ed on an equal footing.

The petitioner's remedy when he claims a benefit under an agreement or an award does not lie by means of a petition under Art. 32 of the Constitution. [391 G-H,

392 A-C] -- , .

ORIGINAL JURISDICTION : Writ Petition No .. 90 of 1976.

(Under Article 32 of the Constitution of India).

M. K. Ramamurthi and J. Ramamurthi, for the appellant.

T. S. Krishnamoorthy Iyer and N. Sudhakaran, for respondent No. 2.

The Judgment of the Court was delivered by

BEG, C.J. The petitioner alleges infringement of his rights under Articles 16 (1) and 31 ( 1) of the Constitution.

He joined the service of the erstwhile Transport Department of the State of Kerala as a Cleaner in the Mechanical Wing in 1949. He was promoted to the post of Helper and then Assistant Mechanic, and, finally, to that of a

Mechnic.

On 15th March, 1965, the Kerala State Transport Corporation was set_ up under s. 3 of the Road Transport Corporations Act, 1950 (hereinafter referred to as "the Act") so that he became a servant of the Corporation.

He alleges that, as the Kera!a State is admirJstering the Corporation and appoints its Chairman and Members under section 5 of the Act, he is entitled to the protection given

• -)

A by the State fo its servants.

According to him, the Corporation i's really an arm or an agent of the State.

We need not, however, consider the .correctness of this proposition as the petitioner has not, in our opinion, succeeded in showing how any of his rights under Article 16 ( 1) of the Constitution, and, even less, how any right of his under Article 31 of the Constitution could have been infringed, assuming that he is a servant of the State.

It appears that on 10th July, 1968 there was a settlement in a dispute between the Corporation and its employees.

Under this settlement, a trade test was to be conducted after inviting applications from lower grades of what are known as the "mechanical line", that is to say, Assistant Electricians, Assistant Tyre Inspectors, Stitchers, Solutioners etc. for filling up posts in the higher grades.

It was mentioned there that "grade promotions" will take place up to the post of Assistant Chargeman, presumably without a "trade test" but, even under this settlement, appointment to the post of chargeman could only take place on the basis of results in "Trade Test" subject to seniority.

Indeed, it was stated there that Assistant Chargeman of more than three years service will be entitled to take part in the trade test.

The "Trade Test" was apparently a test of competence in technical knowledge for the work to be done in the mechanical line.

According to the petitioner, the settlement was operative until an industrial dispute arose.

That dispute was referred to arbitration under section IOA of the Industrial Disputes Act (14 of 1947) on 6th April 1971.

The subject matter of the dispute was widely stated so as to embrace "all questions relating to" wage structure, the ratio between the higher and lower grades, the nature of duties and responsibilities attached to each category, and methods to be adopted for increasing productivity so as to contribute to the maximum efficiency and economic advantages from the working of the Corporation.

Among the matters decided in the Award given was that categorywise seniority, together with Trade Test, should determine the promotions to higher grades.

The Award dated 31st December 1972 was duly notified.

It is true that conditions of service were not sepcifically mentioned among subjects referred to arbitration.

But, promotions based on passing appropriate tests would certainly affect productivity.

Moreover, nobody took steps to assail the Award on any ground whatsoever.

The petitioner alleges that the Corporation and the Workmen subsequently agreed to promotions in the mechanical wing on the basis of seniority alone as had been done in the past under the settlement. To prove such an agreement, the following passage was relied upon from "the minutes of discussion" held in the presence of the Minister (Transport and Electricity) on 20th November, 1973, with the representatives of the Unions of the Mechanical Wing : "It has, therefore, been decided that all existing vacancies upto Assistant Chargemen in the Mechanical Wing will be filled up as was being done in the past.

The Minister, however, pointed out that comprehensive schemes of test, with due importance on the practical side, will be

M. V. KURIAKOSE v. KERALA (Beg, C.J.) 391

introduced for all categories of employees soon.

The Minister promised that the stages at which tests are to be introduced for the various categories of staff will be discussed with the Unions conveniently." This document, signed by the General Manager of the Corporation., contains only minutes of a discussion between the Minister for Transport and Electricity and the. representatives of the Unions.

It is difficult to see bow it could modify the terms of the Award duly made which had become binding and enforceable under s. 17 A of the Industrial Disputes Ac; t.

The Minutes relied upon as proof of an agreement did not even constitute an agreement or settlement which has to be signed by parties to the dispute under s. 19 ( 1) of the Industrial Disputes Act.

The petitioner relies upon his promotion to the post of "Leading Hand" by the Corporation on 30th November, 1973, under the abovementioned alleged agreement. But, on 4th December 197 5 the High Court had set aside the promotion of the petitioner and all others similarly circumstance upon a writ petition filed by an Association of Technical Certificate Holders of the Corporation and one Krishna Kutty, a mechanic of the Corporation. rt appears that, among the opposite parties was the Kerala State Transport Mechanical Workers Union represented by its General Secretary.

Section 18(3) of the Industrial Disputes Act makes it clear that an Award of a Labour Court or Tribunal is binding on all parties to the industrial dispute.

It is true that the petitioner was not individually a party to the proceedings in the High Court which resulted in the quashing of the order of promotion of the 'petitioner together with others on the ground that the Award had been violated by such promotions.

Nevertheless, the petitioner would be deemed to be duly represented by his Union on such a question.

He did not take any steps to assail or to get the judgment and order of the High Court set aside.

The grounds upon which the petitioner attacks the enforcement of what was treated as an Award against him, so that he was reverted, are : firstly, that the so called Award did not relate to matters covered by the previous settlement and subsequent agreement, but contained some observations which had been misinterpreted by the High Court; secondly, that the High Court had misunderstood the. Award inasmuch as it did not contain any direction that a "Trade Test" should be imposed upon those who belonged to the petitioner's category before their promotion; and, thirdly, that he was not a party to the proceedings in the High Court which resulted in the quashing of the document by which he was promoted so that the High Court's order is not binding upon him.

We are not able to agree with the interpretation put forward on behalf of the petitioner upon the Award. The High Court's order shows that not even a counter-affidavit was filed by an Opposite Party and no defence was offered by the Union which represented the petitioner. In any case, the rights of the petitioner under an agreement or an Award, if he had any such right, could not be identified with rights under Article 16 ( 1) of the Constitution.

The result of the quashing of the promotion order relating to a whole category of employees in the position of the petitioner was that all similarly situated shared the

same fate.

All of them had to pass the Trade Test to become entitled to promotion.

In this respect they were treated alike.

It could not be shown what opportunity was denied to the petitioner which was given to anybody else in the same category or with the same qualifications as the petitioner had.

It was immaterial that somebody else, in another category altogether, was not required to pass the trade test which was essential, on the view taken by the High Court, before those in the petitioner's category could claim promotion.

All those in the petitioner's category and with his qnalifications had been placed on an equal footing.

Hence, whatever else might have been contravened, it was certainly not a fundamental right under Article 16 (I) of the Constitution which could be held to have been violated. And, no attempt was even made to show how a right of the petitioner under Article 31 ( l) of the Constitution was affected.

The petitioner's remedy when he claims a benefit under an agreement or an Award does not lie by means of a petition under Article 32 of the Constitution.

This article is reserved exclusively for the enforcement of a fundamental right.

As the petitioner has been unable to disclose how a fnndamental right has been violated, this petition must be and is hereby dismissed.

We make no order as to costs.

M. R.

Petition dismissed.

M. V. KURIAKOSE

THE STATE OF KERALA AND OTHERS

March 25, 1977

M. H. BEG, C.J.

A. C. GUPTA

P. S. KAILASAM, JJ.

Constitution of India

Article 16(1)

Article 32

Art. 32

Art. 16(,1)

Article 16

Art. 32

Article 32

Constitution of India

M. K. Ramamurthi

J. Ramamurthi

T. S. Krishnamoorthy Iyer

N. Sudhakaran

BEG

Articles 16

15th March, 1965

Kerala State Transport Corporation

s. 3

Road Transport Corporations Act, 1950

section 5

Article 16

Article 31

10th July, 1968

Industrial Disputes Act

6th April 1971

31st December 1972

20th November, 1973

s. 17

s. 19

Industrial Disputes Act

30th November, 1973

4th December 197

Krishna Kutty

Section 18(3)

Industrial Disputes Act

Article 16

Article 16

Article 31

Article 32


CHANDER BHAN HARBHAJAN LAL

STATE OF PUNJAB

February 22, 1977

[M. H. BEG, C.J. AND P. S. KAILASAM, J.]

Arbitration Act, s. 8, lvhether applicable when arbitration agrcernent stipulates appointment of Settlen1ent Con1n1ittee by 011e of the parties-On unilateral abolition of Settle111ent Conin1ittee. whether s. S t'JlJJlicahle.

The parties entered into an agreement for the 'execution of son1e construction work. An arbitration clause in the agreelnent stipulated that if disputes arose, the matter would be referred to a Settlen1ent Committee to be :1ppointed by the State Government.

A dispute arose, and a Settlen1cnt Con1mittee \\'as duly constituted, but was unilaterally abolished by the respondent before it concluded its work, Subsequently the respondent appointed another Settlement Committee whose award was set aside by the Civil Court on the ground that it was made even before the expiry of tlte time given by the Co.mmitte~ to the appellant.

The Committee thereafter ceased to exist, an<l the respondent applied to the trial court for appointing an arbitrator u/s. 8(2) of the Arbitrrition Act.

The appellant opposed the same on two grounds.

Firstly that by unilaterally abolishing the first Settlement Committee, the State Government had put an end to the arbitration clause, and no other committee could be appointed nnd secondly, that s. 8 was not applica-ble. The appellants' objections were rejected by the trial court: and later by the High Court in revision.

In appeal before this Court, the respondent also argued that s. 8 would not apply when one riarty could appoint a Settlement Committee without reference to the other party. ·

Dismissing the appeal, the Court,

HELD : ( 1) The \Vording of s. 8, that any party may serve the other parties with a written notice to concur in the a_ppointn1cnt or appointments, or in supplying the vacancy, will include not o; erving other parties in cases in \\'hich the service on the other partv is not conten1plated.

The ection cannct be read as not being applicable where the agreen1ent provides or the nomi:-iation of the Committee by one of the parties, for the section itself says that the party may serve the other parties. [41F-G]

(2) The Government could have appointed a Comn1ittee by itself \vithout coming to court. There is no indication in the cJausc that when once the Committee was unilaterally dissolved no new Committee could be formed.

VVhen the second Committee ceased to function, it became "incapable of acting'' and, therefore, it was within the competency of the Court to proceed to appoint a new Committee. [41E, F]

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 2070/68.

G Appeal i:, y Special Leave from the Judgment and Order dated 16-2-1968 of the Punjab & Haryana High Court in Civil Revision Case No. 107 /66 and

Civil Appeal No. 1784/69.

Appeal by Special Leave from the Judgment and Order dated 25-11-1968 of the Punjab & Haryana High Court in Civil Revision H No. 339 of 1967.

G. L. Sanghi and K. J. John for the Appellants.

S. N. Anand and R. N. Sachthey for the Respondents.

•.'"'

• '

CHANDER BHAN v. PUNJAB (Kai/asam, J.) 39

The Judgment of the Court was delivered by

KAILASAM, J.-Civil Appeal No. 2070 of 1963 is by special leave by the appellants against the judgment of the Punjab and Haryana High Court dismissing the appellant's petition for revising an order passed by the Subordinate Judge, Ambala City, allowing an application by the State, respondent, and appointing the Arbitration Committee. '!he appellants entered into an agreement with the Public W crks Department, Punjab State, for execution of certain constniction works in August, 1952. They entered into an agreement, Ex.

A-l.

The agreement provided an arbitration clause in the following ter1ns :-

111 the matt.er of dispute, the case shall be referred to the cilicment Committee consisting of a Superintending Engineer, an officer of the Finance Department of the rank of at least Deputy Secretary and an Accounts Officer, all to be nominated by the Government for arbitration whose decision w1it be final." Disputes arose between the parties and the State of Punjab appointed a Settler,, ent Committee by notification dated 31st January, 1958.

The Settlement Committee. entered upon the arbitration but before the Arbitration Committee concluded its work the State Government unilaterally abclished the Committee by an order dated 27th March, 1962.

Subsequently by a notification dated 18th May, 1962, the State Ciovernn1ent constiuted a Com1nittee giving the nan1es of three officers with headquarters at Nangal.

The new Committee took up the dispute as well as a claim made by the Government and issued notice to the parties.

The new Settlement Committee passed an award on 25th July, 1962.

The appellants challenged the v; i!idity of the award in the Civil Court.

The Civil Court set aside the second Settlement Committee's award Oil the ground that it was made by the Committee even before the expiry of thc'time given by it to the appellants.

Thereafter, the second Settlement Committee also ceased to function.

Tbc State Government gave notice to the appellant umjcr section 8(1) of the Arbitration Act to concur in the appointment of a fresh Settlement Committee to arbitrate the matter between the parties.

The appellants did not respond to the notice.

The State Government made an application to the trial court for appointment of an arbitrator under section 3(2) of the Arbitration Act.

The appellants ntised two objections, -namely that section 8 was not applicable to the case and that by abolition of the first Settlement Committee the .Stale Government had put an end. to the arbitration clause agreed to between the parties by the agreement at Ex. A-1.

The learned Judge rejected both the grounds and held that after the State Government withdrew the personnel of the first Settlement Committee they became incapable of acting and therefore the court was entitled to :1ct under section 8(1) (b) of the Act.

On the second point it held that the terms of the arbitration clause in the agreement Ex. A-1 diLi not justify reading into it the condition that the intention of the parties was that the vacancies in the Setth<ment Committee for arbitration were not to be filled.

4-240SCI/77

In the Revision Application before the High Court the appellants in effect raised the, same contentions though in a slightly different form.

The High Court agreed with the view of the trial Judge that when once the Government abolished the first Settlement Committee it became incapable of acting and section 8 (1) (b) became applicable. It also agreed with the trial court and found that there was nothing in the terms of the arbitration clause in Ex. A-1 to justify the contention that when once a Settlement Committee was appointed the power under the clause is exhausted.

The High Court held that the trial court was ji..stified in proceeding under sub-section (1) of section 8 in asking the appellant to give the names for consideration of the court for the reconstitution of the Committee and as the appe.Jlants did not give the names the trial court was justified in accepting the names given by the State Government.

In the <lppeal before us the same contentions were raised.

It was submitted that when one of the parties to the arbitration agreement unilaterally disabled the Settlement Committee from functioning the court wiu not assist that party by holding that the Committee became incapable of acting.

It was contended that the provisions of section 8 of the Arbitration Act will not be applicable when one of the parties could appoint a Settlement Committee by itself without reference to the other party.

The learned counsel for the appellant also contended that when the first Settlement Committee ceased to exist by the government unilaterally pntting an end to it, the arbitration clause worked itself out and no other conunittce could be appointed The relevant clause in the agreement though given earlier is again extracted.

"In the matter of dispute, the case shall be referred to the Seltlement Committee consisting of a Superintending Engineer, an officer of the Finance Department of the rank of at least Deputy Secretary and an Accounts Officer, all to be F noillinalecl by the Government for arbitration whose decision will be final"

The clause is an amendment to the original condition No. 5. The clause furtl1er provided tltat the agreement is supplemental to the original agreement and save as varied as hereinbefore provided the said agreement and all the terms and conditions thereof shall contimre to be binding and in full force and effect. The submission of the learned counsel for the appellant is that the clause referred only to the matter already in dispute and to a settlement committee which had been alrea'lY appointed.

Reliance was placed on tJte words underlined in the clause "Ill the matter of dispute", and "referred to the Settlement Committee".

This plea cannot be accepted for in the Ja:ter part of the condition it is made clear by the words "all to be nominated by the Government for arbitration whose decision will be fin;; I." "To be nominated" contemplates a future appointment. But we do not think that this makes any difference for there could be no doubt that the condition enables the Government to appoint three persons holding the ranks specified in the condition as the Settlement

-'~·

CHANDER BHAN v. PUNJAB (Kailasam, !.) 41

Committee.

There is no indication at all that when once the Com- A mittee was dissolved no new committee could be appointed.

In fact it has to be noted that after the first Settlement Committee was dissolved by the unilateral act of the Government a second Committee came into existence and gave an award which was set aside by the Civil Court.

After the award was set aside the second Committee also ceased to function.

There is no material on record to show that the appellants objected to the constitution of the second Committee B on the ground that the condition did not provide for the, appointment of a second Settlement Committee.

There is no reason alleged as to why the second Settlement Committee ceased to function.

If the second Committee was also not terminated by the action of the Government the contention of the appellants that a unilateral act would put the case outside the purview of section 8 of the Arbitration Act would not be available.

On a careful reading of the condition relating to arbitration, we agree with the High Court as well as the trial court that there is no bar to the Government appointing a fresh Committee. for going into the dispute consisting of three officers as stipulated in the condition.

As the appellant would not reply to the letter of the Government seek- D ing to nominate a Settlement Committee the Government moved the court for ai; pointment of the Committee.

The trial court gave an option to the appellant to furnish names but as he did not furnish the names trial court accepted the names suggested by the Government.

On our finding that the Government was entitled to appoint a Committee under the new agreement the Government could have very well appointed a committee by itself without coming to court.

E But may be by way of abundant caution the Government came to court and tile court has appointed a committee as suggested by the State.

We are equally clear that under section 8, the Court is entitled to act and appoint a committee.

As already found by us when the second Settlement Committee ceased to function the Committee

beame "incapable of acting" and therefore it was within the competency of the court to proceed to appoint a new committee.

Equally F ,; ntenable is the contention that section 8 is not applicable to cases where the condition stipulates the appointment of a Settlement Committee by o,1c of the parties.

This submission was made relying on the wording of the section that any party may serve the other parties •• or the arbitrators, as the case may be, with a written notice to concur in the appointment or appointments or in supplying the vacancy. ,:.. .

This part of the section no doubt contemplates two parties but the G section cannot be read as not being applicable where the agreement

~ provides for the nomination of the committee by one of the pames for the section itself says that the party may serve the other parties, "May serve the other parties" will include not serving other parties in cases in which the service on the other party is not contemplated.

In the circumstances we are satisfied that t'1e order of the High Court is prcper and cannot be interfered with.

The appeal is dismissed.

Ihe parties will bear their own costs.

Civil Appeal No. 1734 of 1969

This appeal is similar to the one which we have just now disposed of i.e. C.A.No. 2070 of 1968.

The High Court also dismissed the {>etition .under appeal on the ground that the facts of the case. are similar to the one in Civil Revision Petition No. 107 of 1966 out of which C.A. No. J:J70 of 1968 arose and dismissed the petition on the same grounds.

In this appeal before. us the learned counsel for the appellant adopted the arguments advanced by the counsel in C.A. No. 2070 of 1968 and did not wish to add anything further.

For the reasons stated in C.A.No. 2070 of 1968 we dismiss this appeal also.

No order as to costs.

P.H.P.

Appeals dismissed.

CHANDER BHAN HARBHAJAN LAL

February 22, 1977

M. H. BEG, C.J.

P. S. KAILASAM, J.

s. 8

s. 8(2)

s. 8

s. 8

s. 8

G. L. Sanghi

K. J. John

S. N. Anand

N. Sachthey

KAILASAM

Public W crks Department, Punjab State

State of Punjab

27th March, 1962

Nangal

25th July, 1962

section 8(1)

section 3(2)

section 8

section 8(1)

section 8

section 8

section 8

section 8

section 8

section 8