SOHAN LAL PASSI versus P. SESH REDDY AND OTHERS

SOHAN LAL PASSI versus P. SESH REDDY AND OTHERS

If the owner has appointed a licensed driver and it is not established that he wilfully allowed an unlicensed person to drive, both owner and insurer are jointly and severally liable for compensation to third parties under the Motor Vehicles Act, applying the principle of vicarious liability. Section 96(2)(b)(ii) does not absolve insurer unless wilful breach by insured is proved.

Parties
Appellant: Sohan Lal Passi; Respondents: P. Sesh Reddy and Others
Jurisdiction
India
Judgment Date
17 July 1996
Procedural Posture
Civil Appeal / Supreme Court Appeal From Bombay High Court, F.c.a. No. 6 & 9 of 1985
Outcome
Appeals allowed
Legal Topics
Vicarious Liability, Motor Vehicles Act, Insurance Liability, Compensation for Motor Accidents
Tort Law Motor Accident Claims Insurance Law Vicarious Liability Motor Vehicles Act Insurance Liability Compensation for Motor Accidents

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Parties

Sohan Lal Passi

Appellant

P. Sesh Reddy and Others

Respondents

Procedural Posture

Civil Appeal / Supreme Court Appeal From Bombay High Court, F.c.a. No. 6 & 9 of 1985

Legal Issues

  1. 1 Whether the owner and insurer are jointly liable for compensation when an authorised driver allows a cleaner without a licence to drive and causes an accident
  2. 2 Interpretation of Section 96(2)(b)(ii) of the Motor Vehicles Act regarding insurer liability when the vehicle is driven by a person not holding a licence

Ratio Decidendi

If the owner has appointed a licensed driver and it is not established that he wilfully allowed an unlicensed person to drive, both owner and insurer are jointly and severally liable for compensation to third parties under the Motor Vehicles Act, applying the principle of vicarious liability. Section 96(2)(b)(ii) does not absolve insurer unless wilful breach by insured is proved.

Court Disposition

Appeals allowed

Orders

  • Orders of Claims Tribunal and High Court modified; insurance company and appellant jointly and severally liable to pay compensation to claimants.
  • No order as to costs.