Rajasthan High Court - Jaipur
Suresh Oil Mills vs Kesar Bai on 15 March, 2004
Equivalent citations: 2006ACJ510, RLW2004(3)RAJ1734, 2004(3)WLC107
JUDGMENT Shiv Kumar Sharma, J.
1. Since all these matters arise out of the judgment dated December 18,2000 of the learned Single Judge they are taken up together for disposal.
2. Before the learned Single Judge Civil Misc. Appeals No. 449/99, 452/99, 453/99 were preferred by New India Assurance Company Ltd. (for short 'Insurance Co.'). The appeals bearing No. 245/98 and 775/99 had been filed by Suresh Oil Mill, vehicle owner. Whereas the appeal No. 49/98 was preferred by claimants Smt. Kesar Bai, wife of deceased Nand Bharti and sons and daughters of the deceased, seeking prayer for enhancement of the award and the interest from the date of application and to award the compensation against all the respondents in claim application severally and jointly.
3. Learned Single Judge consolidated the appeals and vide judgment dated December 18, 2000 while allowing the appeals No. 449/99, 452/99 and 453/00 dismissed the appeals No. 245/98, 775/99 and 49/98. The findings arrived at by learned Single Judge have been assailed before us in the instant special appeals.
4. The fateful accident occurred on May 22, 1989 while 15 persons were travelling in a Matador No. RNG 1444. The Matador over turned resulting death of four persons and injuries to number of other such travellers. The claim applications were filed by different claimants which were consolidated. In the written statement filed by Insurance Company, it was pleaded that the Matador was insured as a commercial vehicle for carrying goods whereas at the time of accident it was carrying passengers and there was a breach of condition of policy. Another defence being taken by the Insurance Company was to the effect that the Driver of the vehicle had no valid licence. Before the learned Single Judge the appeals have been filed only on the ground that the claimants being passengers were not liable to be compensated by the Company for breach of the condition of insurance policy. The Tribunal had found that the deceased persons must have been travelling in the Matador as labourers and not as passengers for hire and reward and, therefore, had held that the insurance company was liable.
5. The Appeal No, 245/98 had been filed before the learned Single Judge by Suresh Oil Mill (for short 'Vehicle Owner') against the award dated September 27, 1997 of the Tribunal in MACT case No. 110/89, wherein the award had been passed to the tune of Rs. 1,25,200/- with interest with effect from August 31, 1989. The Tribunal had made liable the Insurance Company and other non claimants to the tune of Rs. 15,000/-and the remaining amount of Rs. 1,10,200 had been fastened on the vehicle owner, The claim had been preferred by the legal heirs of the deceased Nand Bharti who was travelling in Matador RNG 1444. The Matador had met with the accident and in said accident four persons had died and one was injured. Thus total five claim applications were filed. The deceased Nand Bharti was of the age of 35 years with income of Rs. 1000/- per month, the multiplier of 12 was applied. The owner had challenged the award on the ground that the deceased was travelling in the Matador along with his goods for which he had paid fare and thus the vehicle was fully covered with the terms and conditions of the policy. It was also stated that even additional premium was paid and causing of the accident actually amounted to un-limited third party liability. The vehicle owner submitted that whole of the amount ought to have been paid by the Insurance Company as compensation and no liability should be fixed on the vehicle owner.
6. The appeal No. 775/99 had been filed by the vehicle owner challenging the award of Tribunal whereby a compensation had been awarded to the tune of Rs. 67,000/- with interest. Out of the said amount Rs. 15,000/- had been ordered to be paid by the Insurance Company whereas the remaining amount had been fastened on the vehicle owner. The challenge to the award is identical as had been made in CMA No. 245/98.
7. Civil Misc. Appeal No. 49/98 had been filed by claimant Kesar Bai wife of deceased Nand Bharti and sons & daughters of the deceased seeking the prayer of enhancement of award and for granting the interest from the date of application and to award compensation against all the respondents in claim application severally and jointly. Claimant Kesar Bai and sons and daughters of the deceased Nand Bharti have preferred special appeal No. 16/2001 assailing the finding of learned Single Judge.
8. The appeals No. 449, 452 and 453 of 1999 had been preferred by the Insurance Company against the award dated September 27, 1999. Learned Single Judge allowed the appeals of Insurance Company while observing that the ratio indicated in Mallawwa and Ors. v. Oriental Insurance Co. Ltd. and Ors. (1), was applicable and the Insurance Company was not liable. The appeals of vehicle owner were ordered to be dismissed. Against this finding the vehicle owner has filed Special Appeals Nos. 25/2001, 23/2001, 27/2001, 26/2001 and 22/2001.
Special Appeals Nos. 25/2001, 23/2001, 27/2001, 26/2001 and 22/2001:-
9. Learned counsel appearing for the vehicle owner contended that extra premium was paid to cover the risk of third party as is evident from the Insurance Policy (Ex.A-1). According to learned counsel the ratio indicated in Mallawwa's case is not applicable to the facts of instant case s as the vehicle owner paid extra premium to cover third party risk and in view of law laid down in National Insurance Co. v. Rukmani Devi (2), Sohan Lal Passi v. P. Sesh Reddi (3), and National Insurance Co. v. Swarn Singh (4), Insurance Company is liable to indemnify the vehicle owner.
10. Per contra, learned counsel appearing for Insurance Company supported the impugned judgment and placed reliance on Mallawwa and Ors. v. Oriental Insurance Co. Ltd. 7 Ors. (supra), New India Assurance Co. Ltd. v. Kanchan Bewa and Ors. (5), New India Assurance Co. Ltd. v. C.M. Jaya and Ors. (6), National Insurance Co. Ltd. v. Nathilal and Ors. (7), New India Assurance Co. Ltd. v. N.M. Annakutty and Ors. (8), New India Assurance Co. Ltd. v. Asha Rani and Ors. (9), and K. Subbanna Shetty v. Sarojini and Ors. (10).
11. Having scanned the insurance policy (Ex.A-1) we find that additional premium in the sum of Rs. 450/- was paid by he vehicle owner which included Rs. 150/-to cover unlimited personal injury sustained by third party. India Motor Tariffs Schedule of Premiums, provides that the indemnity granted to the insured for the personal injury caused to third party shall be unlimited, if Rs. 150/- as additional premium is paid in respect of Goods Carrying Vehicle. In Mallawwa v. Oriental Insurance Co. (supra), their Lordships of the Supreme Court in para 19 indicated thus:-
"19. Being concerned with a beneficial legislation like the one at hand, we would have normally preferred liberal interpretation, but the question is whether without any extra premium having been paid, the owner of a goods vehicle can claim indemnification from the insurer just because once in a year the goods vehicle had carried a passenger for hire or reward along with the goods. .... ."
Evidently in Mallawwa's case extra premium to cover the third party risk was not paid by the vehicle owner. Therefore ratio indicated in Mallawwa's case can not be held applicable to the facts of instant matters.
12. In a recent judgment rendered in National Insurance Co v. Swarn Singh (supra), their Lordships of the Supreme Court laid down the following principles:-
"(i) Chapter XI of the Motor Vehicles Act, 1988 providing compulsory insurance of vehicles against third party risks is a social welfare legislation to extend relief by compensation to victims of accidents caused by use of motor vehicles, the provisions of compulsory insurance coverage of all vehicles are with this paramount object and the provisions of the Act have to be so interpreted as to effectuate the said object.
(ii) Insurer is entitled to raise a defence in a claim petitions filed under Section 163A or Section 166 of Motor Vehicles Act, 1988 inter alia in terms of Section 149(2)(a)(ii) of the said Act.
(iii) The breach of policy condition e.g. disqualification of driver or invalid driving licence of the driver, as contained in Sub-section (2) (a) (ii) of Section 149, have to be proved to have been committed by the insured for avoiding liability by the insurer. Mere absence, fake or invalid driving licence or disqualification of the driver for driving at the relevant time, are not in themselves defences available to the insurer against either the insured or the third parties. To avoid its liability towards insured, the insurer has to prove that the insured was guilty of negligence and failed to exercise reasonable care in the matter of fulfilling the condition of the policy regarding use of vehicles by duly licensed driver or one who was not disqualified to drive at the relevant time.
(iv) The Insurance companies are, however, with a view to avoid their liability must not only establish the available defence(s) raised in the said proceedings but must also establish 'breach' on the part of the owner of the vehicles; the burden of proof wherefor would be on them.
(v) The court cannot lay down any criteria as to how said burden would be discharged, inasmuch as the same would depend upon the facts and circumstance of each case.
(vi) Even where the insurer is able to prove breach on the part of the insured concerning the policy condition regarding holding of a valid licence by the driver or his qualification to drive during the relevant period, the insurer would not be allowed to avoid its liability towards insured unless the said breach or breaches on the condition of driving licence is/are so fundamental as are found to have contributed to the cause of the accident. The Tribunals in interpreting the policy conditions would apply "the rule of main purpose" and the concept of "fundamental breach" to allow defences available to the insured under Section 149(2) of the Act.
(vii) The question as to whether the owner has taken reasonable care to find out as to whether the driving licence produced by the driver, (a fake one or otherwise), does (not) fulfil the requirements of law or not, will have to be determined in each case.
(viii) If a vehicle at the time of accident was driven by a person having a learner's licence, the insurance companies would be liable to satisfy the decree.
(ix) The claims tribunal constituted under Section 165 read with Section 168 is empowered to adjudicate all claims in respect of the accidents involving death or of bodily injury or damage to property of third party arising in use of motor vehicle. The said power of the tribunal is not restricted to decide the claims interse between claimant or claimants on one side and insured, insurer and driver on the other. In the course of adjudicating the claim for compensation and to decide the availability of defence or defences to the insurer, the Tribunal has necessarily the power and jurisdiction to decide disputes interse between insurer and the insured. The decision rendered on the claims and disputes inter se between the insurer and insured in the course of adjudication of claim for compensation by the claimants and the award made thereon is enforceable and executable in the same manner as provided in Section 174 of the Act for enforcement and execution of the award in favour of the claimants.
(x) Where on adjudication of the claim under the Act the tribunal arrives at a conclusion that the insurer has satisfactorily proved its defence in accordance with the provisions of Section 149(2) read with Sub-section (7), as interpreted by this Court above, the Tribunal can direct that the insurer is liable to be reimbursed by the insured for the compensation and other amounts which it has been compelled to pay to the third party under the award of the tribunal. Such determination of claim by the Tribunal will be enforceable and the money found due to the insurer from the insured will be recoverable on a certificate issued by the tribunal to the Collector in the same manner under Section 174 of the Act as arrears of land revenue. The certificate will be issued for the recovery as arrears of land revenue only if, as required by Sub-section (3) of Section 168 of the Act, the insured fails to deposit the amount awarded in favour of the insurer within thirty days from the date of announcement of the award by the tribunal.
(xi) The provisions contained in Sub-section (4) with proviso thereunder and Sub-section (5) which are intended to cover specified contingencies mentioned therein to enable the insurer to recover amount paid under the contract of insurance on behalf of the insured can be taken recourse of by the tribunal and be extended to claims and defences of insurer against insured by relegating them to the remedy before regular court in cases where on given facts and circumstances adjudication of their claims inter se might delay adjudication of the claims of the victims."
13. In the cases on hand the Insurance Company could not prove that the vehicle owner was guilty of negligence and failed to exercise reasonable care in the matter of fulfilling the condition of the policy regarding use of vehicle. Sohan Lal Passi v. P. Sesh Reddy (supra), was the case wherein the Hon'ble Supreme Court interpreted the expression 'breach' occurring in Section 96(2)(b) of 1988 Act thus:- (Para 12) ". . . The expression 'breach' occurring in Section 96(2)(b) means infringement or violation of a promise or obligation. As such the insured was guilty of an infringement or violation of a promise. The insurer has also to satisfy the Tribunal or the Court that such violation or infringement on the Part of the insured was wilful."
14. Since additional premium to cover third party risk was paid by the vehicle owner and the Insurance Company could not prove that breach of insurance policy on the part of vehicle owner was wilful, the vehicle owner is entitled to claim indemnification from the insurance company.
Appeal No. 16/2001:
15. Coming to the Special Appeal preferred by the claimants Smt. Kesar Bai and others, we find that learned Tribunal awarded to the claimants a sum of Rs. 1,25,200/-as compensation. The age of deceased Nand Bharti, at the time of death was 32 years and the dependency income was assessed as Rs. 800/- per month. Multiplier of 12 was applied for calculating the compensation. Learned Tribunal calculated compensation thus:-
Loss of dependenme income : 800 x 12 x 12 = Rs. 1,15,200/-
Loss of love & affection: Rs. 10,000/-
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Total Rs. 1,25,200/-
We are of the opinion that since the deceased was only 32 years of age at the time of death, multiplier of 17 ought to have been applied by the learned Tribunal while calculating loss of dependency income. In so far as calculation of compensation regarding loss of love and affection is concerned the learned Tribunal ought to have taken into consideration the seven dependents of the deceased. In this view of the matter the compensation awarded by learned Tribunal cannot be termed as sufficient and it is required to step up. The ends of justice would be met if it is stepped up from Rs. 1,25,200/- to Rs. 1,93,200/- (800 x 12 x 7 = 1,63,200 + 30,000). It is however made clear that no interest shall be paid on enhanced award.
16. As a result of the above discussion it is directed that the appellant Suresh Oil Mill (vehicle owner) shall be entitled to claim indemnification from the respondent Insurance Company. In other words vehicle owner and Insurance Company shall be jointly and severally liable to pay the compensation. In Special Appeal No. 16/2001 the award of learned Tribunal is directed to be stepped up from Rs. 1,25,200/- to Rs. 1,93,200/-. However the claimants shall not be entitled to interest on the enhanced award.
17. Instant appeals are disposed off as indicated above and the impugned judgment of learned Single Judge stands modified. No costs.