Madras High Court
M/S.Icici Lombard General vs U.Rengarajulu on 6 February, 2012
Bench: R.Banumathi, S.Vimala
IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 06.02.2012 CORAM : THE HONOURABLE Mrs.JUSTICE R.BANUMATHI and THE HONOURABLE Mrs.JUSTICE S.VIMALA Civil Miscellaneous Appeal No.1905 OF 2010 M/s.ICICI Lombard General Insurance Company Limited, "Chottabhai Centre" II Floor, Nungambakkam High Road, Chennai-600 034. .. Appellant. Vs. 1.U.Rengarajulu 2.R.Saroja 3.Renuka 4.R.Rajamohan 5.R.Sujatha 6.V.Lawrence 7.Jessi Constructions .. Respondents. Civil Miscellaneous Appeal filed under Section 173 of Motor Vehicles Act, 1988 against the Order dated 12.01.2010 made in M.C.O.P.No.101 of 2008 on the file of Motor Accident Claims Tribunal [Chief Judicial Magistrate], Cudallore. For Appellant : Mr.K.S.Narasimhan For Respondents : Mr.Sridhar for R1 to R5 JUDGMENT
R.BANUMATHI,J In this Civil Miscellaneous Appeal, Appellant-Insurance Company challenges the award dated 12.01.2010 passed in M.C.O.P.No.101 of 2008 (FTC O.P.No.66 of 2008) on the file of Motor Accident Claims Tribunal (Chief Judicial Magistrate) at Cuddalore awarding compensation of Rs.13,51,600/- for the death of Uma on the grounds of fastening of liability upon the Appellant-Insurance Company as well as the quantum.
2. The deceased Uma was a diploma holder in Architectural Assistantship and was working as a Tech-Gr.I(A) in Neyveli Lignite Corporation Limited, Neyveli. On 29.10.2007 at about 17.10 hours, when the deceased Uma was returning after her work at Neyveli Lignite Corporation, Neyveli on the left side of the road, near Vishnupriya Kalikoil, Block 27, Neyveli Township, the Crane [Escorts Construction Equipment] bearing Regn.No.TN-31-AZ-5247 belonging to Respondents 6 and 7 and insured with the Appellant-Insurance Company came at a high speed, driven in a rash and negligent manner and hit against the deceased bicycle causing fatal injuries to her and also damaged her cycle. Injured Uma was immediately taken to Government Hospital, Neyveli, where she was declared dead. Regarding the accident, criminal case was registered in Crime No.259 of 2007 of Thermal Police Station against the crane driver. Deceased Uma was earning Rs.16,950/- per month and she was a spinster and was supporting her family. Alleging that the accident was due to negligent driving of crane driver, and that the family has lost the support, parents, brother and sisters of Uma have filed Claim Petition claiming compensation of Rs.75,00,000/-.
3. Before the Tribunal, Respondents 6 and 7 remained absent. Appellant Insurance Company resisted the Claim Petition denying the negligent driving of the Crane. Appellant averred that the accident occurred only due to the negligence of the deceased and that it is a clear case of contributory negligence. Appellant Insurance Company also denied age, occupation and monthly income of the deceased.
4. Before the Tribunal, 2nd Claimant mother examined herself as PW1. Eye witness Rajesh was examined as PW2 and Exs.P1 to P14 were marked on the side of the Claimants. On the side of Respondents, Muthusamy, driver of the Crane was examined as R.W.1 and Sellamuthu, Assistant Manager of ICICI Lombard General Insurance Company Limited was examined as RW2 and Exs.R1 and R2 were marked.
5. Upon consideration of oral and documentary evidence, Tribunal held that the Appellant-Insurance Company has not established the contributory negligence and held that the driver of the crane (RW1) was responsible for the accident. Pointing out that RW1-driver of the crane did not have necessary endorsement in his driving licence to drive the vehicle Crane (Escort construction Equipment), the Tribunal held that the Appellant, being insurer of the vehicle and also the Respondents 6 and 7 who are owners of the Crane are jointly and severally liable to pay the compensation. However, observing that the driver of the crane was not having valid driving licence at the time of the accident, the Tribunal further held that the insurer must pay the compensation to the 3rd party/claimants and gave the Appellant liberty to proceed against the owner for recovery.
6. Mr.K.S.Narasimhan, learned counsel for Appellant-Insurance Company has contended that the Crane being a heavy vehicle, the maximum speed of the vehicle was 15 20 kilometer per hour and therefore, the same could not have been driven at a high speed at the time of accident. It was further submitted that the defence plea that while riding the bi-cycle in the highway, deceased lost her balance and has contributed to the accident and the Tribunal did not properly appreciate the defence plea of contributory negligence.
7. PW2-Rajesh who has witnessed the accident has spoken about the negligent driving of the driver of the Crane. PW2 gave information to the 2nd Claimant-Saroja [mother of the deceased]. Evidence of PW2 is also corroborated by Ex.P1-FIR. PW2-Rajesh being the eye-witness, his evidence stands on higher footing.
8. To substantiate the defence plea of contributory negligence, excepting the driver of the Crane [RW1-Muthusamy], no other witness was examined. By perusal of Ex.P2-Post-mortem certificate, it is seen that deceased sustained fracture of right side 3, 4, 5 and 6th rib bones. Deceased had also sustained fracture of skull. Crane is the heavy vehicle and even a slight hit by the Crane would cause grievous injuries. The nature of injuries sustained by the deceased would clearly show that deceased Uma was hit by a heavy vehicle.
9. Main defence plea is that the driver of the Crane had only the driving licence to drive the Light Motor Vehicle and was not authorised to drive a transport vehicle/heavy vehicle like Crane and therefore, there was violation of policy conditions and the Tribunal ought not to have ordered the Appellant-Insurance Company to pay the compensation and recover the same from the owner of the vehicle.
10. RW1-Muthusamy [driver of Crane] was having driving licence to drive Light Motor Vehicle only. There was no endorsement in the driving licence that he is authorised to drive the transport vehicle. By perusal of Ex.P5-Xerox copy of driving licence, it is seen that RW1-Muthusamy was having valid driving licence to drive Light Motor Vehicle and there was no endorsement to drive the transport vehicle.
11. Section 2(21) of Motor Vehicles Act defines "Light Motor Vehicle" as follows:-
"Section 2 (21) "light motor vehicle" means a transport bus or omnibus the gross vehicle weight of either of which or a motor car or tracter or road-roller unladen weight of any of which does not exceed 7500 kilograms."
12. As per Section 2(28) of Motor Vehicles Act, "Crane" is defined as under:-
"Section 2 (28) "motor vehicle" or "vehicle" means any mechanically propelled vehicle adapted for use upon roads whether the power of propulsion is transmitted thereto from an external or internal source and includes a chassis to which a body has not been attached and a trailer, but does not include a vehicle running upon fixed rails or a vehicle of a special type adapted for use only in a factory or in any other enclosed premises or a vehicle having less than four wheels fitted with engine capacity of not exceeding twenty-five cubic centimetres."
13. As per Section 2(47) of Motor Vehicles Act, "transport vehicle" is defined as under:-
"Section 2 (47) "transport vehicle" means a public service vehicle, a goods carriage, an educational institution bus or a private service vehicle."
Although the definition of "light motor vehicle" brings within its umbrage both "transport vehicle" or "omnibus", there is a clear distinction between "light motor vehicle" and "transport vehicle".
14. Ex.P6 is the Xerox copy of RC Book of the Crane-TN 31 AZ 5247 in which in Column-14, the unladen weight of the Crane is mentioned as 11,200 kilograms. 11,200 kilograms would not fall under the head of "light motor vehicle". Crane is not the "light motor vehicle" and RW1-driver of the Crane was not having licence to drive the Crane. Section 3 of Motor Vehicles Act emphasises upon the necessity for "driving licence". As per Section 3 of the Act, no person shall drive a motor vehicle in any public place unless he holds an "effective driving licence" issued to him authorising him to drive the vehicle.
15. When the driver of the Crane did not having valid driving licence, we need to consider whether the insurer can be directed to pay the compensation to the Claimants and recover the same subsequently from the insured-owner of the vehicle.
16. Doctrine of "pay and recover" was considered by the Supreme Court in 2004 ACJ 1 (SC) [National Insurance Company Ltd. v. Swaran Singh] wherein the Supreme Court examined the liability of the Insurance Company vis-a-vis, the owner and held that liability of the Insurance Company would arise both from the contract as well as from the statute. Elaborately considering the insurer's contractual liability as well as statutory liability vis-a-vis the claims of third parties, in Paragraph (110) the Supreme Court summarised its findings as under:-
"110. The summary of our findings to the various issues as raised in these petitions is as follows:
(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) An insurer is entitled to raise a defence in a claim petition filed under Section 163-A or Section 166 of the 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 the driver or invalid driving licence of the driver, as contained in sub-section (2)(a)(ii) of Section 149, has 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 the 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 a duly licensed driver or one who was not disqualified to drive at the relevant time.
(iv) Insurance companies, 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 vehicle; the burden of proof wherefor would be on them.
(v) The court cannot lay down any criteria as to how the said burden would be discharged, inasmuch as the same would depend upon the facts and circumstances 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 the 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 insurer 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 learners 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 inter se 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 inter se between the 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 the proviso thereunder and sub-section (5) which are intended to cover specified contingencies mentioned therein to enable the insurer to recover the amount paid under the contract of insurance on behalf of the insured can be taken recourse to by the Tribunal and be extended to claims and defences of the insurer against the 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 the adjudication of the claims of the victims. (underlining added)
17. All the subsequent cases are guided by Swaran Singh case. Onus is always upon the Insurance Company to prove that the driver had no valid driving licence and that there was violation of breach of policy conditions. Whenever the driver did not possess valid driving licence and breach of Policy conditions where third party risk is involved, applying the ratio of decision in Swaran Singh case is not automatic. In the facts and circumstances of each case, Court/Tribunal has to consider the nature of alleged breach of policy conditions and the Court may in its discretion direct the insurer to pay first and order recovery.
18. The Supreme Court in subsequent decisions has not treated the previous decisions including Swaran Singh case, as laying down unexceptionable principle that in every claim brought before the Claims Tribunal, the Insurance Company should be directed to pay the compensation amount first even though its defence was found accepted, is evident from some of the later decisions of the Supreme Court. In National Insurance Co., Ltd. v. Bommithi Subbhayamma, 2005 ACJ 721 (SC), the Supreme Court reversed the Division Bench judment of Andhra Pradesh High Court in making the Insurance Company liable for payment of compensation in respect of gratuitous passengers. The Supreme Court held that the Division Bench judgment was based on the decision in New India Assurance Co. Ltd. v. Satpal Singh, 2000 ACJ 1 (SC) which was overruled in New Indian Assurance Co. Ltd. v. Asha Rani, 2003 ACJ 1 (SC) and followed in Oriental Insurance Com. Ltd. v. Devireddy Konda Reddy, 2003 ACJ 468 (SC) and other similar cases and held that the Insurance Companies were not liable for payment of compensation in cases of passengers carried in a goods vehicle for hire or reward or otherwise. While so holding, the Supreme Court gave liberty to the Claimants therein to recover the amount of compensation awarded in their favour by the Motor Accident Claims Tribunal from the owner of the vehicle.
19. In Oriental Insurance Co. Ltd. v. Brij Mohan, 2007 ACJ 1909 (SC) speaking for the Bench, Justice S.B.Sinha,J in Swaran Singh case while holding that the Insurance Company had no liability, however, invoked the power vested in the Supreme Court under Article 142 read with Article 136 of the Constitution of India to direct the Insurance Company to pay the compensation amount first and then realize the same from the owner of the tractor. In Brij Mohan case, the Supreme Court held as under:-
"13. However, respondent No.1 is a poor labourer. He had suffered grievous injuries. He had become disabled to a great extent. The amount of compensation awarded in his favour appears to be on a lower side. In the aforementioned situation, although we reject the other contentions of Ms.Indu Malhotra, we are inclined to exercise our extraordinary jurisdiction under Article 142 of the Constitution of India so as to direct that the award may be satisfied by the appellant but it would be entitled to realize the same from the owner of the tractor and the trolley wherefor it would not be necessary for it to initiate any separate proceedings for recovery of the amount as provided for under the Motor Vehicles Act.
14. It is well settled that in a situation of this nature this Court in exercise of its jurisdiction under Article 142 of the Constitution of India read with Article 136 thereof can issue suitable directions for doing complete justice to the parties."
20. The Division Bench comprising of two judges of the Supreme Court in National Insurance Co. ltd. v. Parvathneni [Appeal (Civil) C.C.No.10993 of 2009 decided on 10.08.2009 doubted the correctness of the directions issued in various judgments to Insurance Company to pay the amount even though they are not held liable. In the said case, the Supreme Court observed as under:-
"We have some reservations about the correctness of the aforesaid decisions of this court. If the insurance company has no liability to pay at all, then, in our opinion, it cannot be compelled by order of the court in exercise of its jurisdiction under Article 142 of the Constitution of India to pay the compensation amount and later on recover it from the owner of the vehicle. In our view, Article 142 of the Constitution of India does not cover such type of cases. When a person has no liability to pay at all, how can it be compelled to pay? It may take years for the insurance company to recover the amount from the owner of the vehicle, and it is also possible that for some reason the recovery may not be possible at all."
The Supreme Court had also framed the following issues for consideration of larger Bench:
"(1) If an insurance company can prove that it does not have any liability to pay the amount in law to the claimants under the Motor Vehicles Act or any other enactment, can the court yet compel it to pay the amount in question giving it liberty to later on recover the same from the owner of the vehicle?
(2) Can such a direction be given under Article 142 of the Constitution and what is the scope of Article 142? Does Article 142 permit the court to create a liability where there is none?"
21. On the strength of the discussion undertaken above, it is not possible for this court to treat the judgment in Swaran Singh case, 2004 ACJ 1 (SC), as containing mandatory directions to the Tribunals and Courts to invariably direct the insurance companies to pay the amounts at the first instance and recover the same fro the owners of the offending vehicles even though they are held not liable. Pending resolution of the issues by the larger Bench of the Supreme Court, it would be reasonable to understand the judgment in Swaran Singh (supra) as leaving discretion to the Tribunals and courts to give appropriate direction depending upon the facts and circumstances of each case.
22. In a catena of decisions, the Supreme Court held that on the basis of Section 149(1) of Motor Vehicles Act and applying of ratio in Swaran Singh case is not automatic. Onus is on the Insurance Company to prove that the driver had no driving licence to escape from the liability. In view of the subsequent decisions and pending resolution of the issues by the larger Bench of the Supreme Court, it is not possible for this Court to treat the judgment of Swaran Singh case containing mandatory directions to the Tribunals and Courts to invariably direct the Insurance Companies to pay the amounts at the first instance and recover the same from the owners of the offending vehicles even though held not liable. The applicability of Swaran Singh case would depend upon the facts and circumstances of each case.
23. Considering the ratio of various decisions and from the facts and evidence, RW1-driver who was driven the Crane had "no effective licence" on the date of accident to drive the Crane. RW1 was having "light motor vehicle" driving licence and he had not obtained necessary authorisation to drive the "transport vehicle"/ "crane". Tribunal has recorded the finding that the owner of the vehicle [Respondents 6 and 7] has knowingly handed over the Crane to RW1-Muthusamy who did not have a special endorsement to drive the vehicle in question. Since the driver of Crane [RW1] was having "Light Motor Vehicle" licence at the time of accident and applying the ratio of the decision, Tribunal has ordered that insurer must pay the third party and recover the same from the owner for the breach of policy conditions.
24. Pointing out that driver of the Crane had Light Motor Vehicle Licence, Tribunal directed the Appellant-Insurance Company "to pay and recover" from the owners of the Crane. In the facts and circumstances of the case, we do not find any reason to interfere with the conclusion of the Tribunal ordering pay and recover and directing the Appellant-Insurance Company to pay the compensation and recover it from the owners.
25. Quantum of compensation Deceased Uma has passed Diploma in Architectural Assistantship and also qualified in typing. Deceased Uma was working as Technician Grade-I(A) in Neyveli Lignite Corporation Limited, Neyveli. In her evidence, PW1-Saroja, mother of the deceased has stated that deceased was getting salary of Rs.16,950/- and apart from working in Neyveli Lignite Corporation Limited, deceased Uma was also doing Architectural consultation services and was earning more than Rs.10,000/- per month and totally deceased Uma was earning Rs.26,950/- per month and deceased Uma was maintaining the family. Even though, PW1 has stated that deceased Uma was getting salary of Rs.16,950/- per month, as is seen from Ex.P9-salary certificate, deceased Uma was getting only salary of Rs.12,620/-. In its finding, Tribunal has stated that as per Ex.P9-salary certificate, the income of the deceased has been fixed at Rs.16,400/-. Tribunal was not factually correct in saying that as per Ex.P9, salary of the deceased was Rs.16,400/- per month.
26. As pointed out earlier, as per Ex.P9, salary of the deceased was only Rs.12,620/- per month. Deceased Uma was aged 42 years at the time of accident. As laid down in Sarla Verma's case, for the deceased person employed in any permanent job above 40 years and below 50 years, 30% addition could be allowed towards future prospects. Since deceased Uma was aged 42 years, as per the ratio of Sarla Verma's case, 30% of her salary works out to Rs.3786/- (Rs.12620 x 30 w 100 = Rs.3786/-). Adding 30% for future prospects, the amount comes to Rs.16,406/- (Rs.12620 + 3686 = Rs.16,406/-), rounded off to Rs.16,400/-. Thus the monthly income fixed by the Tribunal at Rs.16,400/- is confirmed. Tribunal has deducted one-third for personal expenses i.e. Rs.5466.66 and calculated two-third amount towards loss of contribution to the family i.e. Rs.10,933.33 per month and the annual loss of dependency calculated by the Tribunal at Rs.1,31,199.96 (Rs.10,933.33 x 12 = Rs.1,31,199.96), rounded off to Rs.1,31,200/- is confirmed.
27. Multiplier - We have perused Ex.P8-legal heirship certificate from which it is seen that the age of Claimants 1 and 2 is stated as "80" and "70" years respectively. As per Second Schedule to M.V. Act, for the age group above 65 years, the multiplier to be adopted is only "5". Multiplier method involves an assessment of the loss of dependency for the age group of "80" and "70" years respectively. By adopting liberal standards, Tribunal ought to have adopted multiplier "5". When the Claimants 1 and 2 are aged "80" and "70" years respectively, Tribunal was not right in taking the age of the 2nd Claimant as "57" years as stated in the Claim Petition. Considering the age of Claimants 1 and 2 as stated in Ex.P8-legal heirship certificate, the proper multiplier is only "5". Taking the annual income at Rs.1,31,200/- and adopting multiplier "5", the "loss of dependency" is calculated at Rs.6,56,000/- (Rs.1,31,200/- x 5 = Rs.6,56,000/-).
28. Insofar as the conventional damages, Tribunal has awarded Rs.2,00,000/- for "loss of love and affection". Considering the age of Claimants 1 and 2, we feel that the amount of Rs.2,00,000/- awarded by the Tribunal towards "loss of love and affection" is on the higher side and the same is reduced to Rs.1,00,000/- i.e. Rs.50,000/- each to Claimants 1 and 2.
29. Tribunal has awarded Rs.1,00,000/- for "loss of estate/loss of expectation of life" and the same is maintained. Tribunal has also awarded Rs.2,000/- for "funeral expenses" and the same is confirmed.
30. In modification, the total compensation of Rs.13,51,600/- awarded by the Tribunal is reduced to Rs.8,58,000/- as under:-
Loss of dependency : Rs.6,56,000.00 Loss of love and affection : Rs.1,00,000.00 Loss of estate/loss of expectation of life : Rs.1,00,000.00 Funeral expenses : Rs. 2,000.00
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Total : Rs.8,58,000.00
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31. The reduced compensation amount of Rs.8,58,000/- is to be apportioned amongst the Claimants 1 and 2 proportionately in the ratio as ordered by the Tribunal. The interest at the rate of 7.5% per annum awarded by the Tribunal is also in order with the consistent view taken by the Supreme Court and the same is maintained.
32. In the result, the compensation of Rs.13,51,600/- awarded by the Tribunal in M.C.O.P.No.101 of 2008 dated 12.01.2010 on the file of Motor Accident Claims Tribunal [Chief Judicial Magistrate], Cuddalore is reduced to Rs.8,58,000/- payable with interest at the rate of 7.5% per annum from the date of Petition till the date of deposit and the appeal is partly allowed. No costs.
It was stated before us that Appellant-Insurance Company has already deposited the entire compensation amount, from out of which Claimants 1 and 2 were permitted to withdraw 50% of compensation payable to them along with accrued interest. Claimants 1 and 2 are permitted to withdraw the balance amount of reduced compensation payable to them along with proportionate accrued interest. Appellant-Insurance Company is permitted to withdraw the excess compensation deposited along with proportionate interest lying in the credit of M.C.O.P.No.101 of 2008 on the file of Motor Accident Claims Tribunal (Chief Judicial Magistrate), Cuddalore on proper application.
bbr To
1. The Motor Accident Claims Tribunal, Chief Judicial Magistrate, Cuddalore