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Issues Involved:
1. Rash and negligent driving. 2. Course of employment. 3. Quantum of compensation. 4. Liability of the insurance company. Issue-wise Detailed Analysis: 1. Rash and Negligent Driving: The appellants claimed that the accident resulting in Purshottam Tulsidas Udeshi's death was due to the rash and negligent driving of the car by Madhavjibhai Mathuradas Ved, the Manager of the first opponent company. The Claims Tribunal found that the accident was indeed caused by negligent driving. The High Court did not examine this issue, focusing instead on vicarious liability. The Supreme Court emphasized the need to establish negligence first. The claimants relied on the doctrine of "res ipsa loquitur," which shifts the burden of proof to the defendant when an accident's cause is not directly known but is inferred from the circumstances. The Supreme Court found that the car's condition and the accident's nature (dashing against a tree on the wrong side of the road) justified applying this doctrine, thus supporting the claimants' assertion of negligent driving. 2. Course of Employment: The High Court ruled that the owner was not vicariously liable as the act of taking Purshottam as a passenger was neither in the course of employment nor authorized. The Supreme Court disagreed, noting that Madhavjibhai was on company business, and the vehicle was used for delivering money to the company's factory. The Court cited precedents, including Lord Denning's judgment in Young v. Edward Box and Co. Ltd., which established that an employer is liable for the servant's actions if done in the course of employment, even if the passenger is considered a trespasser. The Supreme Court concluded that Madhavjibhai had implied authority to drive the vehicle and carry Purshottam, thus making the company liable. 3. Quantum of Compensation: The Claims Tribunal awarded Rs. 33,209.15, including Rs. 2,000 for funeral expenses. The High Court did not address this issue. The Supreme Court recalculated the compensation based on the deceased's monthly income of Rs. 425, totaling Rs. 27,500 for five years, including special damages for funeral expenses. This adjustment was accepted by both parties. 4. Liability of the Insurance Company: The insurance company contested its liability, arguing that the statutory insurance did not cover passenger injuries, except for those carried for hire or reward. The Supreme Court agreed, citing Section 95 of the Motor Vehicles Act, which excludes passenger liability unless explicitly covered. The insurance policy in question included an endorsement covering passenger liability up to Rs. 15,000. The Supreme Court upheld this limit, ruling that the insurance company's liability was restricted to Rs. 15,000, with the remaining amount to be paid by the owner. Conclusion: The Supreme Court allowed the appeal, holding the owner vicariously liable for the accident caused by negligent driving during the course of employment. The compensation was adjusted to Rs. 27,500, with the insurance company's liability capped at Rs. 15,000. The appeal was allowed with costs to be shared equally by the respondents.
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