Madhya Pradesh High Court
Shanker Prasad vs Smt. Maltidevi And Ors. on 11 April, 1997
Equivalent citations: II(1998)ACC706, 1998ACJ860, AIR1998MP88, 1998(1)MPLJ89, AIR 1998 MADHYA PRADESH 88, (1998) 1 MPLJ 89, (1998) 1 TAC 683, (1998) 2 ACC 706, (1998) 2 ACJ 860, (1998) 2 CIVLJ 668
JUDGMENT S.K. Dubey, J.
1. This is owner's appeal u/Section 173 of the Motor Vehicles Act, 1988 against the award dt. 10-7-1996 in Motor Accident Claim Case No. 10/90 passed by the Vth Addl. Motor Accident Claims Tribunal, Bilaspur.
2. Facts giving rise to this appeal are thus: The respondents Nos. 1 to 3 filed an application under Section 110-A of the Motor Vehicles Act, 1939 (the 'Act of 1939') on 9-3-1988 before the Claims Tribunal, Bilaspur to claim compensation of Rs. 1,82,000/- for death of Shivprasad aged about 37 years, the husband of respondent No. I and father of respondents 2 and 3 who died in motor accident on 1-1-1988 by the use of Truck No. MPL 7112 owned by the appellant, insured by the respondent No. 8 and driven by respondent No. 9 at the relevant time. The deceased hired the Truck on payment of Rs. 3007- for carrying his goods/ bundles of cloth to the weekly market in Khodri Bazar. As the driver of the appellant was not available the appellant engaged the respondent No. 9 a duly licensed driver arranged by the deceased to drive the truck. For the safety and security of loaded goods the deceased also travelled in the truck. On the way the truck turned turtle as a result of which Shivprasad died. The appellant and the insurer contested the claim while the respondent No. 9 remained ex parte. The insurer disowned its liability as the risk was not covered under Proviso (ii) of clause (b) of Sub-section (1) of Section 95 of the Act of 1939 and also in the terms of the policy as the deceased was not carried in the truck as a result of contract of employment with the owner of the truck.
3. The Tribunal after appreciating the evidence on record adduced by the parties held that the accident occurred due to breakage of band-arm, U bolt of front spring and of central bolt. But it was due to negligence of the appellant as the appellant has failed to establish that the mechanical failure had resulted despite all cares and caution on his part and he failed to keep the truck in road-worthy condition. After holding so the Tribunal worked out the compensation in all Rs. 1,37,0007- with interrest thereon at the rate of 12% per annum from the date of application till payment, which was ordered to be paid by the owner and driver jointly and severally. The insurer was absolved from the liability to indemnify the owner and to pay compensation holding that the deceased was travelling in the truck as a passenger with his bundles of cloth. He was not carried in the vehicle for hire or reward in pursuance of contract of employment. Not only this, the driver permitted 10-15 persons to travel with their goods for sale in the market, on payment of fare, which was a breach of contract of insurance Ex.D/1.
4. Shri Manish Datt, learned Counsel for the appellant contended that as the truck was hired by the deceased for carrying his goods to the market, and he was travelling along with his goods for their safety and security, hence, in view of the decision of full Bench of this Court in Harishankar Tiwari v. Jugru Laxman Sahu, 1987 MPLJ 594 : (AIR 1987 Madh Pra 234), and recent pronouncement of the Supreme Court in B.V. Nagaraju v. Oriental Insurance Co. Ltd., AIR 1996 SC 2054, the Tribunal committed an illegality in absolving the Insurance Company from its liability. The award of compensation was challenged as excessive. It was also submitted that the claim remained pending for no fault of the appellant from 1988 and was decided on 10-7-1996, therefore, the appellant could not have been burdened with interest of the long period of litigation, reliance was placed on a decision of this Court in Oriental Insurance Co. Ltd. v. Ramsingh, 1995 Jab LJ 342 : (AIR 1995 Madh Pra 171).
5. Shri Section K. Rao learned Counsel for the respondent-Insurance Company while supporting the finding recorded by the Tribunal for absolving the insurer, submitted that even an owner of goods who hires a goods vehicle and travels with his goods does not become a person travelling on the vehicle in pursuance of a contract of employment. The goods vehicle does not become the vehicle meant for carrying the passengers for hire or reward within the purview of proviso to Section 95(l)(b) of the Act of 1939 as it is restricted to the person or classes of persons specified in the policy and relates to these persons only who are carried in the vehicle in pursuance of contract of employment. Counsel cited a Bench decision of this Court in New India Assurance Co. v. Ashok Singh, 1990 MPLJ 496, Full Bench decisions of High Courts of Punjab and Haryana, Karnataka and Orissa reported in Oriental Fire and General Insurance Co. Ltd. v. Gurdev Kaur, 1967 Acc CJ 158 : (AIR 1967 Punj 486); National Insurance Co. Ltd. v. Dundamma, 1992 Acc CJ 1 : (AIR 1992 Kant 3); New India Assurance Co. Ltd. v. Kanchan Bewa, 1994 Acc CJ 138 : (AIR 1994 Orissa 65). The reported decisions : New India Assurance Co. Ltd. v. Sulochana Bewa, 1995 Acc CJ 1267 : (AIR 1995 Ori 153); M. Kandaswamy Pillai v. Chinnaswamy, 1985 Acc CJ 232 : (AIR 1985 Mad 290); G. Dhayanand v. Zaamni Bi, 1982 Acc CJ 399 : (AIR 1982 Mad 311); New India Assurance Co. Ltd. v. Santha, 1988 Acc CJ 689 (Mad) were also cited.
6. Shri Sanjeev Saxena, learned Counsel for the respondents/claimants while supporting the owner so far as in relation to the liability of the Insurance Company submitted that no interference is called for in the award of compensation and interest as the amount of compensation so awarded is not excessive.
7. The contention of Shri Rao placing reliance on the decisions referred that the Insurance Company is not liable to cover the risk of hirer/ agent or his employees travelling in goods vehicle as he is not a passenger carried for reward or by reason of in pursuance of contract of employment, need not to detain us as a Full Bench of this Court as back in the year 1986 in Harishankar Tiwari, AIR 1987 Madh Pra 234 (supra), considered the question in view of Section 95(1)(b)(ii) and Rule 111 of M. P. Motor Vehicles Rules, 1974 and after discussing the case law and Full Bench decisions of Punjab and Haryana High Court in Oriental Fire and General Insurance Co. Ltd. v. Gurdev Kaur, AIR 1967 Punj 486 (supra) and of Gujarat High Court in Ambaben v. Usmanbhai Amirmiya Sheikh, AIR 1979 Guj 9, ruled that an Insurance Company is liable to cover the risk of a hirer/ agent or his employees travelling in a goods vehicle under proviso (ii) of clause (b) of Section 95(1) of the Act as a passenger carried for reward or by reason of or in pursuance of a contract of employment. The hirer while paying hire charges for carrying the goods in the vehicle and while he or his employees required to travel with the goods for its safety m the vehicle, will be deemed to have been carried in the vehicle for reward while his employee was carried in the vehicle in pursuance of his employment. So the hirer and his employee both have to be covered under the insurance policy and the insurer is bound to pay compensation for the death or bodily injury when the vehicle met with the accident.
8. A Full Bench of this Court in Kallu Maharaj v. Neenabai, 1989 Jab LJ 490 : (AIR 1989 Madh Pra 167), considered the vehicle referred in Section 95(1)of the Act, Section 96 of the Act of 1939 and Rule 111 of M. P. Motor Vehicles Rules 1974 and distinguishing the Full Bench decision in Harishankar Tiwari's case, AIR 1987 Madh Pra 234 (supra), observed in para 6 thus :
"The vehicle referred to in the clause 'a vehicle in which passengers are carried for hire or reward' occurring in Section 95(1) of the Act necessarily means that vehicle which can be lawfully used for carrying passengers for hire or reward. Rule 111 of the M. P. Motor Vehicles Rules, 1974, lays down that no person shall be carried in a goods vehicle other than a bona fide employee of the owner or the hirer of the vehicle or the owner or the hirer and except in accordance with that rule. It is thus clear that a truck cannot be lawfully used for carrying a person who has not hired the truck but travels with a view to fetch his goods from some other place. Such a person, in our opinion, cannot be held to be travelling for hire or reward. Such a person would be deemed to be a gratuitous traveller and in these circumstances, the insurer, in the absence of any term to the contrary in the insurance policy would not be liable for the tortious act of the owner as this would not be the requirement of the insurance policy as laid down by Section 95(1) of the Act."
9. True, the decisions cited by Shri Rao of other High Courts take a contrary view that proviso (ii) to Section 95(1)(b) did not apply to the passengers carried for hire or reward in goods vehicle and it is restricted to such passengers carried in a public service vehicle. The goods vehicle certainly does not fall within the definition of 'public service vehicle' Under Section 2(25) and therefore, in view of proviso (ii) to Section 95(1)(b) would not apply to persons carried for goods vehicle for hire or reward. An owner of goods who has hired a goods vehicle does not become a person travelling on the vehicle in pursuance of a contract of employment and even if he is carrying his goods after hiring the vehicle, the vehicle does not become a vehicle meant for carrying passengers for hire or reward and consequently would not come within the proviso (ii) to Section 95(1)(b).
10. The Full Bench of Karnataka High Court in National Insurance Co. Ltd. v. Dundamma, AIR 1992 Kant 3, after considering the Rule 161 of Karnataka Motor Vehicles Rules, 1963 and Clause (ii) of proviso to Section 95(1)(b) of the Act of 1939 observed that the test to find out as to whether according to Section 95 of the Act the risk in respect of passengers covered or not is not as to whether the passengers had paid hire or fare, but the question is as to whether the vehicle is authorised by law to carry passengers for hire or reward. After discussing the law the Court held that the Insurance Company is not liable as the vehicle was not used as adopted in law to carry passengers, and answered the question referred to in para 31 thus :
"Under a motor vehicle insurance policy issued by an Insurance Company in conformity with Section 95 of the Motor Vehicles Act, 1939, the Insurance Company is not liable by the force of Clause (ii) of the proviso to Section 95(1)(b) of the Act to pay compensation in respect of death of or bodily injury to any person travelling in a vehicle which is not a vehicle constructed or adopted and meant in law for carrying passengers for hire or reward such as a goods vehicle even to the extent of number of passengers/persons permitted to be carried in the vehicle, except in respect of the owners of the goods travelling in a goods vehicle having engaged the vehicle under an agreement with the owner for carrying goods for hire or reward, and the goods carried are those as defined in Section 2(7) of the Act, subject to the condition that such liability shall cover only up to the extent of the number of persons permitted to be carried in the goods vehicle under Rule 161 of the Karnalaka Motor Vehicles Rules, 1963."
11. However, as the two Full Bench decisions of this Court which are holding the field since 1986 and the said decisions as a judicial discipline are binding on this Court we are not inclined to take a different view and to refer the question for larger Bench. For that, another reason is that recently the Supreme Court in case of B.V. Nagaraju, AIR 1996 SC 2054 (supra), though considered the question in relation to the own damage claim observed that on account of alleged breach of carrying human in goods vehicle more than the number permitted in terms of the insurance policy is not so fundamental a breach so as to afford to the insurer to eschew liability altogether. The Supreme Court interpreted the exclusion term of insurance policy on the principle of reading down to serve main purpose. The observations are in paras 6 and 7 of the judgment which are quoted thus:
"6. Learned Counsel for the appellant, in support of this appeal, strongly relied on Skandila's case, AIR 1987 SC 1184, making a fervent appeal that the terms of the policy afore referred to, should be read down to carry out the main purposes of the policy as the presence of 9 persons (when up to 6 were permissible), irrespective of their being employees or not, had not contributed in any manner to the occurring of the accident as also when the claim did not relate to any injuries to those 9 persons (who were owners of the goods loaded) or any loss incurred by them; the claim pristinely relating to the damage caused to the vehicle insured, which could not have been denied in the facts and the circumstances. Strong reliance, in support was sought from the reasoning of the State Commission which had in so many words said :
"......Even for the sake of argument, that 9 persons travelling in the vehicle were passengers, it cannot be a ground for Insurance Company to repudiate the contract as the fact of their being passengers or coolies does not make any difference to the risk involved. These persons were in no way concerned with the cause of the accident nor have they contributed to the risk in respect of the loss caused to the vehicle. The complainant has not claimed any compensation in respect of his liability to the persons travelling in the vehicle."
"7. It is plain from the terms of the Insurance Policy that the insured vehicle was entitled to carry 6 workmen, excluding the driver. If these 6 workmen when travelling in the vehicle, are assumed not to have increased any risk from the point of view of the Insurance Company on occurring of an accident, how could those added persons be said to have contributed to the causing of it, is poser, keeping apart the load it was carrying. Here, it is nobody's case that the driver of the insured vehicle was responsible for the accident. In fact, it was not disputed that the oncoming vehicle had collided head-on against the insured vehicle, which resulted in the damage. Merely by lifting a person or two, or even three, by the driver or the cleaner of the vehicle, without the knowledge of owner, cannot be said to be such a fundamental breach that the owner should, in all event, be denied indemnification, the misuse of the vehicle was somewhat irregular though, but not so fundamental in nature so as to put an end to the contract, unless some factors existed which, by themselves, had gone to contribute to the causing of the accident. In the instant case, however, we find no such contributory factor. In Skandie's case, AIR 1987 SC 1184 (supra), this Court paved the way towards reading down the contractual clause by observing as follows (at pp. 119 and 1992 of AIR) :
".....When the option is between opting for a view which will relieve the distress and misery of the victims of accidents or their dependants on the one hand and the equally plausible view which will reduce the profitability of the insurer in regard to the occupational hazard undertaken by him by way of business activity, there is hardly any choice. The Court cannot but opt for the former view. Even if one were to make a strictly doctrinaire approach, the very same conclusion would emerge in obeisance to the doctrine of 'reading down' the exclusion clause in the light of the 'main purpose' of the provision so that the 'exclusion clause' highlighted earlier. The effort must be to harmonize the two instead of allowing the exclusion clause to snipe successfully at the main purpose. The theory which needs no support is supported by Carter's "Breach of Contract" vide paragraph 251. To quote :
Notwithstanding the general ability of contracting parties to agree to exclusion clauses which operate to define obligations there exists a rule, usually referred to as the "main purpose rule", which may limit the application of wide exclusion clauses defining a promisor's contractual obligations. For example, in Glynn v. Margeltson & Co., 1893 AC 351 (357), Lord Halsbury, L.C. stated : It seems to me that in construing this document which is a contract of carriage between the parties, one must in the first instance look at the whole instrument and not at one part of it only. Looking at the whole instrument, and seeing what one must regard, as its main purpose, one must reject words, indeed whole provisions, if they are inconsistent with what one assumes to be the main purpose of the contract.
Although this rule played a role in the development of the doctrine of fundamental breach the continued validity of the rule was acknowledged when the doctrine was rejected by the House of Lords in Suissee Atfanticue Societe d' Armement Maritime S.A. v. N. V. Rot-terdamsche Kolen Centrale, (1967) 1 AC 361. Accordingly, wide exclusion clauses will be read down to the extent to which they are inconsistent with the main purpose, or object of the contract."
12. This Court following the decisions in B.V. Nagarajan, AIR 1996 SC 2054; Harishankar Tiwari, AIR 1987 Madh Pra 234; and Kallu Maharaj, AIR 1989 Madh Pra 167 (supra), has held in New India Insurance Co. v. Smt. Kusum Damodarrao Kole, N.A. 442/92 decided on 14-8-1996; Oriental Insurance Co. v. Smt. Chamare, N.A. 265/93 decided on 31 -7-1996 : (reported in AIR 1997 Madh Pra 194); and another appeal New India Assurance Company Ltd. v. Smt. Mangali Bai, N.A. 383/87 decided on 17-9-1996, has taken the view that a passenger who travels with his goods for their safety the Insurance Company cannot escape its liability to pay compensation or to indemnify the insured.
13. Reliance on Division Bench decision of this Court in Ashok Singh's case, 1990 MPLJ 486 (supra) is of no help as in that case the claimant was not travelling in the goods vehicle for hire or reward or by reason of or in pursuance of contract of employment nor was travelling as the owner of the goods.
14. However, in the present case, the Tribunal has recorded a finding that the deceased after hiring the truck not only was travelling in the truck along with his cloth bundles, but, the driver arranged by him who was engaged by the appellant to drive the truck, permitted about 12 persons to travel in the truck along with their goods, from which he charged the fare separately per passenger, besides the fare for carrying goods. It was not a case of lifting one or two persons and that the claim relates to the person who died in accident, and the vehicle was being used for the purpose other than for the purpose it was adopted for its use and such passengers were carried in breach of the terms of the policy 'a fundamental breach' as the passengers could not have been lawfully carried or permitted to travel in the goods vehicle, the Tribunal rightly absolved the insurer from its liability as the appellant permitted the use of the vehicle as a public service vehicle.
15. As to quantum of compensation and interest : the compensation awarded on the facts of the case, in our opinion, is not excessive, but, is low. However, the claimants/respondents have not filed appeal for enhancement, therefore, we are not inclined to disturb the award. As to the award of interest for a long period spent in litigation of about 9 years 3 months, we are of the view that delay is disposed of the claim before the Tribunal was not attributable to the appellant, therefore, it would be unjust to burden the appellant with the award of interest for the total period spent in litigation. Hence, relying on the decision of this Court in Ramsingh case, AIR 1995 Madh Pra 171 (supra), we direct that the appellant along with the driver who are jointly or severally liable to pay the compensation as quantified by the Tribunal with interest for a total period of five years. Appellant shall deposit the amount under the award with interest so awarded by us less the amount already deposited by it within the month from the date of supply of certified copy, failing which, interest will be payable at the rate of 15% per annum. On deposit the amount shall be disbursed to claimants keeping in mind the guidelines laid down by the Supreme Court in General Manager, Kerala State Road Transport Corporation v. Ms. Susamma Thomas, AIR 1994SC 1631 and Lilaben Udesingh Gohel v. Oriental Insurance Co. Ltd., (1996) 3 SCC 608 ; (AIR 1996 SC 1605).
16. In the result, the award of the Tribunal is maintained except the reduction in the amount of interest as above. Accordingly, the appeal stands disposed of with no order as to costs.