Partly allowed

United India Insurance Co. Ltd., Karnool Branch, v. North-West Karnataka Transport Corporation

Karnataka HC5 Dec 2023MFA/21686/2012

Case brief

AI extract

What is this about?

Loss-of-revenue compensation for accident-damaged buses was denied where reserve buses operated on the same routes. The court dismissed the transport corporation’s appeals and partly allowed the insurers’ appeals, setting aside revenue-loss awards while preserving compensation under other heads.

What did the court decide?

Loss-of-revenue/idling awards set aside; other compensation maintained with 6% annual interest from petition until realization. Excess deposits refundable to insurers.

United India Insurance Co. Ltd., Karnool Branch, Vs… — Motor Accident Claims | Karnataka HC (2023)

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NC: 2023:KHC-D:14257 MFA No. 23362 of 2012 C/W MFA No. 24018 of 2011 MFA No. 21686 of 2012 MFA No. 22147 of 2012 MFA No. 25492 of 2012 MFA No. 22189 of 2013 MFA No. 22841 of 2013

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IN THE HIGH COURT OF KARNATAKA DHARWAD BENCH

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DATED THIS THE 5^TH DAY OF DECEMBER, 2023

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BEFORE

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THE HON'BLE MR JUSTICE HANCHATE SANJEEVKUMAR

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MISCELLANEOUS FIRST APPEAL NO.23362/2012(MV) C/W

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MISCELLANEOUS FIRST APPEAL NO.24018/2011(MV) MISCELLANEOUS FIRST APPEAL NO.21686/2012(MV) MISCELLANEOUS FIRST APPEAL NO.22147/2012(MV) MISCELLANEOUS FIRST APPEAL NO.25492/2012(MV) MISCELLANEOUS FIRST APPEAL NO.22189/2013(MV) MISCELLANEOUS FIRST APPEAL NO.22841/2013(MV)

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IN MFA.NO.23362/2012:

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BETWEEN:

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Digitally signed by BHARATHI H M

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NORTH - WEST KARNATAKA TRANSPORT, CORPORATION GOKUL ROAD, HUBBALLI, REPRESENTED BY ITS DIVISIONAL CONTROLLER, GADAG DIVISION, HUBBALLI ROAD, GADAG, BY ITS CHIEF LAW OFFICER, HUBBALLI.

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…APPELLANT

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(BY SRI SUNIL S. DESAI, ADVOCATE)

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AND:

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MRS. V. V. G. N. PRASAD GUPTA D/O. SATYANARAYAN, AGE: MAJOR, OCC: BUSINESS, DOOR NO.13/92, MAIN ROAD, R/O.CHAGALAMARRI (P AND M) DIST: KARNOOL.

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UNITED INDIA INSURANCE CO. LTD., KARNOOL BRANCH, INSURER OF THE LORRY.

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CHALLE LAXMI RADDI S/O. MUNI REDDI, AGE: MAJOR, OCCP: DRIVER OF THE LORRY, R/O: CHINTAKUNTA, DEVUR (A.P.).

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…RESPONDENTS

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(BY SMT. PREETI SHASHANK, ADVOCATE FOR R2; NOTICE TO R1 AND R3 ARE DISPENSED WITH)

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THIS MFA IS FILED UNDER SECTION 173(1) OF THE MOTOR VEHICLES ACT, 1988, PRAYING TO MODIFY THE JUDGMENT AND AWARD DATED 07.01.2012 PASSED BY THE LEARNED FAST TRACK COURT AND ADDITIONAL MOTOR VEHICLE ACCIDENTS CLAIMS TRIBUNAL GADAG, IN MVC NO.90/2004 AND ETC.,

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IN MFA.NO.24018/2011:

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BETWEEN:

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NORTH - WEST KARNATAKA TRANSPORT, CORPORATION, GOKUL ROAD, HUBBALLI, DIST: DHARWAD, REPTD. BY ITS DIVISIONAL CONTROLLER, GADAG DIVISION, GADAG, REPRESENTED BY ITS CHIEF LAW OFFICER, N.W.K.R.T.C. CENTRAL OFFICE, HUBBALLI.

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…APPELLANT

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(BY SRI S.C.BHUTI, ADVOCATE)

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AND:

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VIJAY S/O. DAVALAPPA DODDAMANI, AGE: 45 YEARS, OCC: BUSINESS, R/O: WALVEKAR HAKKAL, BANKAPUR CHAWL, P.B.ROAD, GADAG, DIST: GADAG. (OWNER OF LORRY BEARING REGN. NO.KA-25/B-1807).

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DIVISIONAL MANAGER,

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NEW INDIA ASSURANCE CO, LTD., OPP. KITTLE COLLEGE, P.B.ROAD, DHARWAD, (POLICY NO.670700/31/5/02538) VALID FROM:3.6.2005 TO 2.6.2006)

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…RESPONDENTS

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(BY SRI N.R.KUPPELUR, ADVOCATE FOR R2; NOTICE TO R1 IS DISPENSED WITH)

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THIS MFA IS FILED UNDER SECTION 173(1) OF THE MOTOR VEHICLES ACT, 1988, PRAYING TO MODIFY THE JUDGMENT AND AWARD PASSED BY THE FAST TRACK COURT AND ADDITIONAL MOTOR ACCIDENT CLAIMS TRIBUNA, GADAG, IN MVC NO.367/2006 DATED 07.02.2011 AND ETC.,

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IN MFA.NO.21686/2012:

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BETWEEN:

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UNITED INDIA INSURANCE CO. LTD., KARNOOL BRANCH, REPRESENTED THROUGH ITS SR. DIVISIONAL MANAGER, UNITED INDIA INSURANCE CO., LTD., IST FLOOR, ANKOLA ARCADE, OPP: KALABHAVAN, DHARWAD.

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…APPELLANT

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(BY SMT. PREETI SHASHANK, ADVOCATE)

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AND:

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NORTH - WEST KARNATAKA TRANSPORT, CORPORATION, GOKUL ROAD, HUBBALLI, REPRESENTED BY ITS DIVISIONAL CONTROLLER, GADAG DIVISION, GADAG.

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MRS. V. V. G. N. PRASAD GUPTA D/O. SATYANARAYAN, AGE: MAJOR, OCC: BUSINESS,

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DOOR NO.13/92, MAIN ROAD, R/O.CHAGALAMARRI (P AND M) DIST: KARNOOL.

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CHALLE LAXMI RADDI S/O. MUNI REDDI, AGE: MAJOR, OCCP: DRIVER, R/O: CHINTAKUNTA, DEVUR (A.P.), (DRIVER OF THE LORRY NO.ATQ 7223).

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…RESPONDENTS

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(BY SRI SUNIL S. DESAI, ADVOCATE FOR R1; R2 AND R3 ARE SERVED)

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THIS MFA IS FILED UNDER SECTION 173(1) OF THE MOTOR VEHICLES ACT, 1988, PRAYING TO CALL FOR THE RECORDS CONNECTED WITH MVC NO.90/2004 ON THE FILE OF THE FAST TRACK COURT AND ADDITIONAL MOTOR ACCIDENT CLAIMS TRIBUNAL, AT GADAG, EXAMINE THE SAME AND SET ASIDE THE AWARD DATED 07.01.2012 AS AGAINST THE APPELLANT AND ETC.,

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IN MFA.NO.22147/2012:

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BETWEEN:

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THE DIVISIONAL MANAGER, NATIONAL INSURANCE COMPANY LIMITED, SUJATHA COMPLEX, P.B.ROAD, HUBBALLI BY ITS ADMINISTRATIVE OFFICER, REGIONAL OFFICE, SUJATHA COMPLEX, P. B. ROAD, HUBBALLI.

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…APPELLANT

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(BY SRI M.Y.KATAGI, ADVOCATE)

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AND:

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NORTH - WEST KARNATAKA TRANSPORT, CORPORATION, GOKUL ROAD, HUBBALLI, REPRESENTED BY ITS DIVISIONAL CONTROLLER, GADAG, DIVISION GADAG SHRI S.K.HALLI, AGE: MAJOR, OCC: DIVISIONAL CONTROLLER, N.W.K.R.T.C., GADAG,

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MRS. RAJAM MARIMUTHU S/O MR. MARIMUTHU, AGE: MAJOR, OCC: BUSINESS, R/O: 23, 1^ST FLOOR, 3^RD CROSS, N.T.PET (NEW TARAGUPET, BANGALURU)

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…RESPONDENTS

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(BY SRI M.M.KHANNUR, ADVOCATE FOR R1; APPELA DISMISSED AS AGAINS R2)

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THIS MFA IS FILED UNDER SECTION 173(1) OF THE MOTOR VEHICLES ACT, 1988, PRAYING TO SETTING ASIDE THE IMPUGNED JUDGMENT AND AWARD DATED 15.02.2012 PASSED BY THE FAST TRACK COURT AND ADDITIONAL MOTOR ACCIDENT CLAIMS TRIBUNAL, GADAG, IN MVC NO.230/2006 AND ETC.,

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IN MFA.NO.25492/2012:

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BETWEEN:

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NEW INDIA ASSURANCE CO. LTD., REGIONAL OFFICE, MOTOR THIRD PARTY HUB OFFICE, SRINATH COMPLEX, 2^ND FLOOR, NEW COTTON MARKET, HUBBALLI – 580 029, REPRESENTED BY ITS ASSISTANT MANAGER.

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…APPELLANT

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(BY SRI R.R.MANE, ADVOCATE)

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AND:

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NORTH - WEST KARNATAKA ROAD TRANSPORT, HUBBALLI, REPRESENTED BY ITS DIVISIONAL CONTROLLER, DIVISION GADAG.

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…RESPONDENT

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(BY SRI S.C.BHUTI, ADVOCATE)

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THIS MFA IS FILED UNDER SECTION 173(1) OF THE MOTOR VEHICLES ACT, 1988, PRAYING TO SET ASIDE THE JUDGMENT AND AWARD DATED 02.05.2012 PASSED BY THE COURT OF DISTRICT JUDGE AND MOTOR ACCIDENT CLAIMS TRIBUNAL, GADAG, IN MVC NO.109/2009 AND ETC.,

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NC: 2023:KHC-D:14257 MFA No. 23362 of 2012 C/W MFA No. 24018 of 2011 MFA No. 21686 of 2012 MFA No. 22147 of 2012 MFA No. 25492 of 2012 MFA No. 22189 of 2013 MFA No. 22841 of 2013

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IN MFA.NO.22189/2013:

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BETWEEN:

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NORTH - WEST KARNATAKA ROAD, TRANSPORT CORPORATION LTD., REPTD. BY ITS DIVISIONAL CONTROLLER, SIRSI, KSRTC DIVISIONAL OFFICER, HUBBALI ROAD, SIRSI, CENTRAL OFFICER HUBBALLI, CENTRAL OFFICE, HUBBALI.

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…APPELLANT

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(BY SRI M.M.KHANNUR, ADVOCATE)

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AND:

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M/S SESA GOVA LIMITED, REGD. OFFICE SESA GHOR, EDC, COMPLEX, PATTO, PANAJI, NORTH GOA – 403 001.

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THE BRANCH MANAGER, BAJAJ GENERAL ALLIANZ, INSURANCE CO. LTD., E.Z.PLAZA, AIRPORT ROAD, YARAVADA, PUNE – 411 006.

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…RESPONDENTS

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(BY SRI S. K. KAYAMATH, ADVOCATE FOR R2; NOTICE TO R1 IS DISPENSED WITH)

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THIS MFA IS FILED UNDER SECTION 173(1) OF THE MOTOR VEHICLES ACT, 1988, PRAYING TO SET ASIDE THE JUDGMENT AND AWARD PASSED BY THE SENIOR CIVIL JUDGE AND ADDITIONAL MOTOR ACCIDENT CLAIMS TRIBUNAL, SIRSI IN MVC NO.133/2010 DATED 31.10.2012 AND ETC.,

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NC: 2023:KHC-D:14257 MFA No. 23362 of 2012 C/W MFA No. 24018 of 2011 MFA No. 21686 of 2012 MFA No. 22147 of 2012 MFA No. 25492 of 2012 MFA No. 22189 of 2013 MFA No. 22841 of 2013

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IN MFA.NO.22841/2013:

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BETWEEN:

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NEW INDIA ASSURANCE CO. LTD., RAM COMPLEX, 29, PARAMATHI RAOD, NAMAKKAL, HEREIN REPRESENTED BY NEW INDIA ASSURANCE CO. LTD., REGIONAL OFFICE, MOTOR THIRD PARTY HUB OFFICE, SRINATH COMPLEX, 2^ND FLOOR, NEW COTTON MARKET, HUBBALLI – 580 029, REPRESENTED BY ITS DEPUTY MANAGER.

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…APPELLANT

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(BY SRI R.R.MANE, ADVOCATE)

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AND:

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NORTH - WEST KARNATAKA ROAD, TRANSPORT CORPORATION, GOKUL ROAD, HUBBALLI, REPRESENTED BY ITS DIVISIONAL CONTROLLER, GADAG DIVISION, GADAG – SHRI N.B.MRUTHYUNJAYAPPA, AGE: MAJOR, OCC: N.W.K.R.T.C. SERVICE, R/O: GADAG.

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THE BRANCH MANAGER, BAJAJ ALIYANZ, GENERAL INSURANCE CO. LTD., E.Z.PLAZA, AIRPORT ROAD, YARAVADA, PUNE – 411 006.

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…RESPONDENTS (BY SRI N.S.KINI, ADVOCATE FOR R1; NOTICE TO R2 IS DISPENSED WITH)

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THIS MFA IS FILED UNDER SECTION 173(1) OF THE MOTOR VEHICLES ACT, 1988, PRAYING TO SET ASIDE THE JUDGMENT AND AWARD DATED 26.07.2012 PASSED BY THE COURT OF DISTRICT JUDGE AND MOTOR ACCIDENT CLAIMS TRIBUNAL, GADAG, IN MVC NO.42/2010 AND ETC.,

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THESE APPEALS, COMING ON FOR FURTHER DICTATION, THIS DAY, THE COURT DELIVERED THE FOLLOWING:

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JUDGMENT

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MFA No.23362/2012, MFA No.24018/2011 and MFA

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No.22189/2013 are filed by the KSRTC challenging the judgment and award passed by the tribunal questioning not granting of compensation under the head “loss of revenue”.

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MFA No.21686/2012, MFA No.22147/2012, MFA No.25492/2012 and MFA No.22841/2013 are filed by the respective insurance companies challenging the judgment and award questioning grant of compensation under the head “loss of revenue”.

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Common facts involved in these appeals are that the KSRTC has preferred claim petitions before respective tribunal and some of the tribunals have granted compensation under the head “loss of revenue” and some

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MFA No. 23362 of 2012 C/W MFA No. 24018 of 2011 MFA No. 21686 of 2012 MFA No. 22147 of 2012 MFA No. 25492 of 2012 MFA No. 22189 of 2013 MFA No. 22841 of 2013

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of the tribunals have declined to grant of compensation

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towards “loss of revenue”.

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Therefore, the common question involved in these appeals is that where bus belongs to

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KSRTC/Transport business company meets with accident and bus got damaged, by which, the trip of that bus is cancelled and if another spare bus is assigned on that schedule route then in such an event, whether KSRTC/Transport business company are entitled for compensation under the head idling charges because of loss of revenue when the bus is in garage for repair.

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The learned counsel for the KSRTC submitted that due to the accident to bus, the bus is constrained to get repair in the workshop and during such idle period under the repair in the workshop, the bus cannot ply on the scheduled route. Therefore, KSRTC is entitled for compensation under the head “loss of revenue” since the

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bus is in workshop for repair. Therefore, submitted that

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how many days bus is in the garage, the bus cannot ply in the schedule route, so far as the bus is concerned it’s schedule operation is cancelled. Therefore, it is amounting to loss of revenue to the KSRTC because the KSRTC is constrained to keep the bus idle in the work shop. Therefore, prays to grant of compensation under the head “idle charges/loss of revenue” according to the earning of the income per trip by that particular bus.

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The learned counsel for the KSRTC places reliance on the following judgments:

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1. In the case of Managing Director, KSRTC Vs. United India Insurance Co. Ltd., in MFA No.4377/2001 dated 20.07.2006.

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1. In the case of Senior Divisional Controller, KSRTC, Mangalore Vs. Sri.Rahamatulla B.Nashipudi and others, in MFA No.9718/2012 dated 10.06.2014.

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1. Karnataka State Road Transport Vs. Abdul Majeed reported in ILR 1990 KAR 1493 dated 10.12.1989.

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1. The Branch Manager, National Insurance Company Limited Vs. The Managing Director NWKRTC, Bagalkot in MFA No.20867/2008 dated 25.07.2014.

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1. The Oriental Insurance Co. Ltd. Vs. Divisional Controller, KSRTC, Mangalore in MFA No.2217/2011 dated 20.02.2017.

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1. Karnataka State Road Transport Corporation(KSRTC) Vs. Siddaraju and another, in MFA No.2366/2018 dated 01.09.2022.

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1. Managing Director, BMTC, Shanthinagar Vs. Union of India and another in MFA No.913/2013 dated 05.02.2020.

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1. The Oriental Insurance Company Limited, Bangalore Vs. North West Karnataka road transport Corporation, Hubli and another in MFA NO.8430/2003 dated 08.08.2006.

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1. The Oriental Insurance Co. Ltd. Vs. The Managing Director, KSRTC, Bangalore in MFA NO.4784/2009 dated 16.08.2017.

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On the other hand, learned counsel appearing

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for insurance company submitted that the KSRTC is not entitled for compensation under the head “idle

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charges/loss of revenue” for the reason that even though the schedule bus assigned in the route meets with accident but other spare buses are assigned in the said route and therefore, the KSRTC will not lose revenue at any cost in that route. Therefore, submitted that the KSRTC is not entitled for compensation under the head loss of revenue due to idle of bus in the garage.

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Further argued with reference to Section 72 of the Motor Vehicles Act, 1988 (for short “the Act”) and Rule 69(A) of the Karnataka Motor vehicle Rules 1989 (for short “the Rule”) and submitted that the intention of legislature in Section 72 of MV Act and Rule 69(A) of Rule, passengers shall not suffer inconvenience in canceling the trip. Therefore, a compulsion is made on the transport

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business company/KSRTC to keep spare buses according to the number of permits applied by the KSRTC/Transport business company. Therefore, there is no question of loss of revenue since spare bus runs on the route. Therefore, the KSRTC/Transport business company is able to earn revenue from that route even though scheduled bus meets with accident and kept in workshop for repair. Therefore, submitted that KSRTC is not entitled for compensation under the end loss of revenue as virtually there would not be any loss of revenue by the KSRTC/Transport business company.

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The counsel for the insurance company places reliance on the following judgments of this court:-

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North West Karnataka Transport Corporation, Hubli Vs. Pushpaja W/o Suhas Prabhu and another in MFA No.22143/2009 dated 10.01.2014.

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M/s Shriram General Insurance Co. Ltd., Rajasthan Vs. Karnataka Road transport , Bangalore in MFA No.2833/2012 dated 29.10.2022.

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National Insurance Co. Ltd., Bangalore vs. Senior Divisional Controller, Mangalore and another and connected matters in MFA No.6416/2014 c/w MFA No.4481/2014 dated 23.12.2020.

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North West Karnataka Road Transport Corporation Ltd., Hubbali Vs. Nagarajayya H.S. and another in MFA No.20689/2013 dated 14.09.2021.

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Upon hearing the submissions of respective

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learned counsel appearing for KSRTC and insurance company, the point that arise for my consideration is as follows:

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Whether under the facts and circumstances

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involved in the case, where a bus attached with

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KSRTC/Transport business company meets with accident and got damaged and when the said bus is caught in the work shop of the garage for repair work for some days and when a spare bus is assigned on the said route by the KSRTC/Transport business company, then, in such an event KSRTC is entitled for compensation under the head “idle charges/loss of revenue?”.

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The Ruling placed by the learned counsel appearing for the KSRTC are that this Court in many cases inclined granting compensation under the head “loss of revenue” since the bus was constrained to keep in the garage workshop for repair. Therefore, in those judgments, this court has granted compensation to the KSRTC under the head loss of revenue to the bus as the bus is constrained to keep in the garage/work shop for repair.

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In the judgments relied on by the KSRTC, the

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grant of compensation under the head “loss of revenue” is a mere opinion of the court by not laying down any law in this regard without interpreting relevant statue.

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In the Rulings relied on by the counsel for the Insurance company, this court in those judgments declined to grant compensation under the head “loss of revenue / idling charges” is also an opinion formed by the court. In the case of Pushpaja (supra), this court has made interpretation of sub section (2) of Section 72 of the Act and Rule 69(A) of the Rules and declined to grant compensation under the head loss of revenue.

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Here, the question is whether KSRTC/Transport business companies have suffered loss of revenue where scheduled bus on the route meets with accident and spare bus is assigned on the scheduled route is to be considered.

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Loss of revenue as contended by the KSRTC/Transport

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Business Company is to be considered on two aspects.

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Route specific revenue

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Bus specific revenue

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These two namely route specific revenue and

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bus specific revenue are two different aspects which are governing to decide the loss of revenue to the KSRTC/Transport bus company.

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Whether KSRTC/Transport Business Company is

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actually has suffered loss of revenue is to be decided on these two aspects.

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The KSRTC/Transport Business Company will earn revenue by operating buses on the schedule routes. Therefore, whether the bus is earning revenue plying on the schedule route is earning revenue because of the bus is assigned to the said route and this earning of revenue is route specific revenue or bus specific revenue is to be

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considered. Where a spare bus is assigned on the reason that the regular bus plying on the route got damaged in the accident, whether this can be considered as loss of revenue to the KSRTC/Transport Business Company. Therefore, on these aspects the question of loss of revenue/idling charges is to be considered on the principles of route specific revenue and bus specific revenue as above stated. This is to be appreciated with relevant statutes.

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Clause 17(xvii) of Sub-section 2 of Section 72 of MV Act stipulates as follows:-

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“72. Grant of stage carriage permits (1) Subject to the provisions of Section 71, a Regional Transport Authority may, on an application made to it under Section 70, grant a stage carriage permit in accordance with the application or with such modifications as it deems fit or refuse to grant such a permit:

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provided that no such permit shall be granted in respect of any route or area not specified in the application.

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(2) The Regional Transport Authority, if it decides to grant a stage carriage permit, may grant the permit for a stage carriage of a specified description and may, subject to any rules that may be made under this Act, attach to the permit any one or more of the following conditions, namely-

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(1) to (xvi) - XXXX

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(xvii) The vehicles to be kept as reserve by the holder of the permit to maintain the operation and to provide for special occasions;”

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As per these provisions of law, it is mandatory on the part of the transport business company to keep the vehicles as reserve by the holder of permit to maintain the operation in any contingent events that means, if a bus meets with accident, then the reserved bus can be plied on the said schedule route with an intention not to cause inconvenience to the commuters/passengers of the bus.

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As per the provision of law, while transport authority issuing permit, it is empowered by this Act to impose the conditions enumerated under Section 72 and one of the condition is putting condition clause 17 as above stated. The intention of legislature with its objects and reasons to enact this provision is for the reason that if any Transport Business Company is operating buses then, the said Transport Business Company have to reserve vehicles by the holder of permit for the purpose of maintaining operations on the said route and to provide for special occasions. What is special occasion means in case if a bus meets with accident and by virtue of that operation of the said bus is cancelled because of damage caused in the accident, then KSRTC/Transport Business Company shall assign reserve bus on the route in the interest of commuters/passengers of the bus that the passengers shall not suffer any inconvenience. Therefore, the transport service by the KSRTC or by any other Transport

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Business Company are semi-commercial and semi-service.

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Providing service of buses on the routes is blending between commercial purpose and service oriental object, keeping in interest of the public. Taking service of transportation by a citizen is fundamental right as per Article 21 of the Constitution of India and thus, corresponding duties assigned on the KSRTC/TBC to provide bus on the assigned route without taking any excuse that the bus met with the accident and trip is cancelled. This excuse cannot be taken by the KSRTC/TBC corporation/companies. Therefore, when this being the intention of legislature while issuing permit to the KSRTC/TBC to provide service to the public, then necessarily and mandatorily, they have to maintain spare buses/reserved buses to meet any contingent event. Therefore, such condition is stipulated while issuing permit to the KSRTC/TBC. Hence, considering this, the

¶183

22 - NC: 2023:KHC-D:14257 MFA No. 23362 of 2012 C/W MFA No. 24018 of 2011 MFA No. 21686 of 2012 MFA No. 22147 of 2012 MFA No. 25492 of 2012 MFA No. 22189 of 2013 MFA No. 22841 of 2013

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KSRTC/TBC is earning revenue based on the “specific route ”.

¶185

While issuing permit and stipulation of such condition is to make operation on the said schedule route hassle free without taking any excuse that the bus met with accident and canceling trip, but the KSRTC/TBC has to maintain operations on the schedule route keeping in view the whole object of not putting the public at inconvenient stage by canceling the trip. Therefore, what the KSRTC/TBC are earning revenue is based on the route specific revenue . When this being the fact, whether the KSRTC/TBC are put to condition while issuing permit by transport authorities, directing the KSRTC/TBC to operate the reserve bus/spare bus on the said route, therefore, the revenue generation is route specific centric but not bus specific revenue earning. Therefore Rule 69-A of the Karnataka Motor Vehicle Rules, 1989

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23 -

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stipulates maximum number of reserve vehicles that can

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be maintained according to the number of permits. Rule 69-A of the Rules stipulates as follows:

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69-A. Maintenance of reserve vehicles.– The conditions regarding maintenance of reserved vehicles specified in clause (xvii) of sub-section (2) of section 72 of the Act, shall be incorporated in every permit granted to a person and the maximum number of reserve vehicles to be maintained with valid permits for such use shall be as specified in the table below:

¶191

	No. of permits	Maximum number of reserve vehicles that can be maintained
Up to	4……….	1
”	5 to 10……	2
”	11 to 20…..	3
”	21 to 30…..	4
”	31 to 40…..	5
”	41 to 50…..	6
”	51 and above…….	Not less than 10% of the fleet Strength.]

¶192

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This Rule 69-A of the Rules is in consonance

¶194

with section 72 of the M.V.Act. Section 72 empowers power to the transport authorities to put conditions as enumerated in section 72 of the Act keeping in view the interest of public while providing transport services by the KSRTC/TBC as it is a fundamental right provided by the Constitution of India. When this being the legal position, the object and reason for framing Rule 69-A is that according to the number of permit being issued by the transport authorities, number of reserve vehicles can be maintained. Maintaining reserve vehicles is not for revenue generation by the vehicles but to provide hassle free transport service to the public. Therefore, when this being the legal position, if any bus of the KSRTC/TBC meets with accident and operation of the said bus is cancelled, but to assign reserve bus/spare bus on the said schedule route, hence in this regard there would not be any loss of revenue to the KSRTC and TBC. But as above stated

¶195

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earlier, the revenue generation by the KSRTC/TBC is a route specific revenue but not bus specific revenue. Hence, when it is obligatory on the part of the KSRTC/TBC to assign spare bus/reserve bus on the route in case of a scheduled bus is damaged, there could not be loss of revenue by not operating the schedule route. Therefore, if a bus meets with accident and got damaged and is kept in the garage for repair, for that the KSRTC/TBC are entitled for compensation on other heads as per law, but not entitled for loss of revenue.

¶197

This can be illustrated by quoting an example. If a person is operating two buses daily from the place A to B and B to A and one bus meets with accident, inevitably the route of that bus is cancelled, then in such an event the owner of bus/vehicles is suffering loss of revenue because he is not able to maintain spare bus/reserve bus because he has only two busses. But in

¶198

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the case of KSRTC/TBC where they are operating many hundred number of buses and obtaining permits from the transport authorities and there it is obligatory on the part of them according to the permit issued, they have to maintain reserve bus/spare bus and in any contingent event as discussed above they have to operate spare bus/reserve bus; under such an event there would not be any loss of revenue; because reserve bus is operating on the same route. This is the difference between two aspects route specific revenue and bus specific revenue.

¶200

Hence for the reasons above discussed, when in these appeals where it is evident that reserve buses were operated on the route, when the bus meets with accident, then it could not be said that there is loss of revenue because of the cancelled bus and reserve bus is placed and made to operate on the said route; therefore under these factual matrix and circumstances involved in these

¶201

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appeals, the KSRTC/TBC are not entitled for compensation to that loss of revenue/idling charges.

¶203

In the decisions placed by the KSRTC that this Court has granted compensation to the loss of revenue/idling charges are mere opinion of the Court. Likewise, this Court has declined to grant compensation towards loss of revenue and idling charges is also mere opinion. No specific reasons are assigned with statute except in the Pushpaja case(supra).

¶204

Therefore accordingly the question of law raised is answered in the negative by holding that the KSRTC/TBC are not entitled for compensation under the head loss of revenue/idling charges. Therefore in the appeals filed by the insurance company grant of compensation towards loss of revenue/idling charges is set aside by maintaining the award on other heads. Therefore the appeals filed by the insurance company are liable to be

¶205

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allowed in part. The appeals filed by the KSRTC are liable to be dismissed.

¶207

In all the cases the compensation amount shall carry interest at the rate of 6% p.a. from the date of petition till realization.

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In the result, I proceed to pass the following:

¶209

ORDER

¶210

i) The appeals in MFA No.23362/2012, MFA No.24018/2011 and MFA No.22189/2013 filed by the KSRTC are dismissed.

¶211

ii) The appeals in MFA No.21686/2012, MFA No.22147/2012, MFA No.25492/2012 and MFA No.22841/2013 filed by the respective insurance companies are allowed in part.

¶212

iii) In the appeals filed by the insurance company, grant of compensation towards loss of revenue/idling charges is set aside by maintaining the award on other heads.

¶213

29 -

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iv) In all the cases the compensation amount shall carry interest at the rate of 6% p.a. from the date of petition till realization.

¶216

v) The amount in deposit in all these appeals shall be transmitted to the tribunal.

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vi) Excess amount in deposit, if any, shall be refunded to the appellants-insurance companies.

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vii) No order as to costs.

¶219

viii) Draw award accordingly.

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SD/JUDGE

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HMB- Up to para 18 SSP- para 19 to 19 MRK-para 20 to end List No.: 1 Sl No.: 87 CT-ASC

United India Insurance Co. Ltd., Karnool Branch, v. North-West Karnataka Transport Corporation

Case brief

What is this about?

What did the court decide?

United India Insurance Co. Ltd., Karnool Branch, v. North-West Karnataka Transport Corporation

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

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