Civil Appeal Nos. 3594-3611, 3612-3629, 3630, 3631, 3632, 3633, 3634, 3635, 3636, 3638, 3639, 3640, 3641, 3642, 3643, 3644, 3645, 3646, 3647 and 3648 of 2010. Case: Vadodara Municipal Corporation Vs Purshottam V. Murjani. Supreme Court (India)

Case NumberCivil Appeal Nos. 3594-3611, 3612-3629, 3630, 3631, 3632, 3633, 3634, 3635, 3636, 3638, 3639, 3640, 3641, 3642, 3643, 3644, 3645, 3646, 3647 and 3648 of 2010
JudgesV. Gopala Gowda and A.K. Goel, JJ.
IssueConsumer Protection Act, 1986; Bombay Provincial Municipal Corporation Act, 1949 - Sections 62, 63, 66; Vessels Act, 1917; Public Liability Insurance Act, 1991; Motor Vehicles Act, 1988; Insurance Regulatory and Development Authority Act, 1999; Insurance Regulatory and Development Authority (Protection of Policyholders Interest) Regulation, 200...
Judgement DateSeptember 10, 2014
CourtSupreme Court (India)


A.K. Goel, J.

  1. These appeals have been preferred against the judgment of the National Consumer Disputes Redressal Commission (for short "NCDRC") dated 2nd November, 2006 in F.A. Nos. 464/2002 and 61 to 77 of 2004 by the Vadodara Municipal Corporation (for short "the Corporation"), the Oriental Insurance Company Ltd. (for short "the Insurance Company") and the proprietor of Ripple Aqua Sports (hereinafter referred to as "the Contractor") against the award of compensation for the death of 22 persons by drowning in Sursagar Lake at Vadodara while riding the boat, on account of negligence in plying the boat.

  2. Sursagar Lake is under the control and management of the Corporation which has been plying boats for joy rides and boating club. During the period in question, the contract for plying the boats was given to Ripple Aqua Sports vide licence agreement dated 26th September, 1992 for managing the affairs of the Boating Club at the Lake for purposes of entertainment. The agreement, inter alia, provided that the facility of boating was to be given to the public. It was necessary that the contractor shall be taking insurance policies to cover the risk liability of all persons using the equipment of the club. The Corporation had the right to supervise the boating club. Accordingly, the Contractor took insurance policy dated 1st November, 1992. On 11th August, 1993, against the capacity of 20 persons, 38 passengers were allowed to ride in the boat which capsized resulting in the death of 22 passengers.

  3. The victims approached the State Commission on 30th March, 1994 and around under the provisions of Consumer Protection Act, 1986 claiming compensation alleging deficiency of service on the part of the Contractor and the Corporation. The victims claimed that the insurance policy covered the claim to the extent of Rs. 20 lakhs per passenger with maximum of Rs. 80 lakh in one year. Under the Bombay Provincial Municipal Corporation Act, 1949, the Corporation had the duty to maintain the safety of the passengers and in case of negligence, the Corporation had the tortuous liability under the law. The Corporation was also liable for tortious acts of the Contractor. The passengers had taken tickets for the boat ride but on account of deficiency in service the passengers drowned on capsizing of the boat which was overloaded. The occurrence took place on account of negligence of the contractor as well as failure of the Corporation to exercise due care. No life guards were provided, no life saving jackets were provided and if suitable safety measures would have been taken, the lives of the victims could be saved.

  4. The Insurance Company contested the case and submitted that as per the insurance policy given, the liability was limited to Rs. 1 lakh per person. Stand of the Corporation was that complainants were not consumers and had remedy under the Indian Vessels Act, 1917. The Contractor was independent licensee without any control of the Corporation. The stand of the Contractor was that it was not liable as the claimants were not consumers and the liability was of the Corporation. The Insurance Company also opposed the claim and also submitted that its liability did not exceed Rs. 20 lakhs.

  5. The State Commission allowed the claims. It held that even a public authority exercising statutory power was not exempt from liability for negligent actions. When the Corporation exercised control over the Contractor, it was vicariously responsible for the negligence of...

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