Karnataka High Court
Basappa S/O Bhimappa Laddi vs Shivanagouda S/O Venkanagouda Patil on 28 January, 2022
Author: S.Vishwajith Shetty
Bench: S.Vishwajith Shetty
MFA 24077/2009
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IN THE HIGH COURT OF KARNATAKA
DHARWAD BENCH
DATED THIS THE 28TH DAY OF JANUARY 2022
BEFORE
THE HON'BLE MR.JUSTICE S.VISHWAJITH SHETTY
M.F.A.No.24077/2009
BETWEEN:
Basappa,
S/o Bhimappa Laddi,
Age: 44 years,
Occ: Agriculture,
R/o Nagaral, Tq: Mudhol,
Dist: Bagalkot. ..APPELLANT
(By Sri Pavan B.Doddatti, Adv.)
AND:
1. Shivanagouda,
S/o Venkangouda Patil,
Age: 37 years,
Occ: Agriculture,
R/o Nagaral, Tq: Mudhol,
Dist: Bagalkot.
2. The Branch Manager,
Oriental Insurance Company Ltd.,
Branch Office, Mudhol,
Tq: Mudhol, Dist: Bagalkot. ..RESPONDENTS
(By Sri Ravindra R.Mane, Adv. for R-2;
R-1 served)
This miscellaneous first appeal is filed under Section
173(1) of the MV Act, against the judgment and award dated
16.10.2009 passed in MVC No.461/2005 on the file of the
Member, MACT-VI, Jamkhandi, partly allowing the claim
MFA 24077/2009
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petition for compensation and seeking enhancement of
compensation.
This appeal having been heard and reserved for
judgment on 14.01.2022, coming on for 'Pronouncement of
Judgment', this day the Court delivered the following:-
JUDGMENT
1. The instant appeal is filed by the claimant challenging the judgment and award dated 16.10.2009 passed in M.V.C.No.461/2005 by the Motor Accident Claims Tribunal No.VI, Jamkhandi sitting at Mudhol, on the ground of quantum as well as liability to pay the compensation.
2. For the sake of convenience, the parties to this appeal are referred to by their rankings assigned to them before the Tribunal.
3. Brief facts of the case that would be relevant for the purpose of disposal of this appeal are, the claimant had filed M.V.C.No.461/2005 under Section 166 of the Motor Vehicles Act, 1988, claiming compensation of `19,50,000/- with interest from the respondents in MFA 24077/2009 -3- respect of the injuries suffered by him in the road traffic accident that had taken place on 23.04.2005.
4. It is the case of the claimant that on 23.04.2005, the claimant had gone to Mahalingpur and when he was waiting for the bus near Mahalingpur Belagalli Circle, respondent no.1 came there in his Hero Honda motor cycle bearing registration No.KA-29/J-3910 and offered to give a lift to the claimant. Since respondent no.1 was known to the claimant, the claimant sat on his motor cycle as a pillion rider. Respondent no.1 who was riding the motor cycle in a rash and negligent manner lost control of his bike when he reached near Karewwadevi's temple and as a result, the bike fell on the road causing the accident. The claimant suffered grievous injuries to his left leg in the said accident, and therefore, he was immediately shifted to Dr. Umarani's Hospital at Gokak, wherein he was treated as an inpatient for the injuries sustained by him in the accident. It is the case of the claimant that because of the injuries suffered in the accident, he was not in a position to do his agricultural MFA 24077/2009 -4- work as earlier and he was also not able to lift heavy things. It is under these circumstances, he had filed the claim petition before the Tribunal, which was partly allowed by the Tribunal vide the impugned judgment and award, wherein the Tribunal had awarded global compensation of `65,000/- to the claimant with interest at 6% per annum from the date of petition till realization. The owner of the offending motor cycle was directed to pay the compensation and the Insurer of the said vehicle was absolved of its liability. Being aggrieved by the same, the claimant has preferred this appeal.
5. Learned Counsel for the claimant submits that the Tribunal was not justified in absolving the liability of the Insurer solely on the ground that the claimant was a pillion rider. He submits that the claimant is a third party, and therefore, the Insurer of the offending motor cycle ought to have been held liable to pay the compensation amount. In support of this submission of his, he has relied upon the judgment of the coordinate bench of this Court in MFA No.200966/2014 (Pintu Vs Sri MFA 24077/2009 -5- Umalu & another) disposed of on 16.04.2019 and MFA No.2643/2010 (New India Assurance Co. Ltd. Vs G.Nagaraju & Others) disposed of on 09.06.2010. He further submits that a perusal of the insurance policy would go to show that the Insurer has collected extra premium from the insured towards extra loading. Since extra premium was collected by the Insurer, the Tribunal ought to have saddled the liability to pay the compensation amount on the Insurer. In support of this submission of his, he has relied upon the judgment passed by the coordinate bench of this Court in MFA No.4063/2009 (The Oriental Insurance Co. Ltd. Vs Sri Johar Bin Shariff & another) disposed of on 26.03.2013 and MFA No.8069/2007 (The Oriental Insurance Co. Ltd. Vs Dilawarsab Aminasab Sutagatti & another) disposed of on 27.06.2014. He further submits that the Full Bench of this Court in MFA No.30131/2010 (NEW INDIA ASSURANCE CO. LTD. VS NINGAWWA & OTHERS) - 2020(2) KCCR 1405, has held that if extra premium is paid, the policy is required to be considered as a contractual policy and not as an act MFA 24077/2009 -6- policy. He submits that the Insurer has not offered any satisfactory explanation with regard to the reason for which extra premium is collected, and therefore, it has to be presumed that having regard to the collection of extra premium, the policy is a contractual policy and not an act policy. He submits that the compensation awarded by the Tribunal is also on the lower side. The notional income of the injured claimant has been taken at `3,000/- and having regard to the year of the accident, the notional income ought to have been taken at `3,500/- in view of the income chart maintained by the Karnataka State Legal Services Authority for the purpose of disposing of road traffic accident cases. He submits that having regard to the grievous injuries suffered by the claimant including fracture injuries, the compensation awarded towards pain and suffering, loss of amenities in future life, etc., are also on the lower side. He submits that the Tribunal has not properly considered the loss of earnings of the injured claimant. Accordingly, he prays to allow the appeal. MFA 24077/2009 -7-
6. Per contra, learned Counsel appearing for the Insurer submits that the policy issued by the Insurer in respect of the offending vehicle is an act policy, and therefore, the pillion rider's risk is not covered under the said policy. He submits that this Court as well as the Hon'ble Apex Court have consistently held that under an act policy, the pillion rider's risk is not covered. In this regard, he has referred to the judgment of the Hon'ble Supreme Court in the case ORIENTAL INSURANCE COMPANY LIMITED VS SUDHAKARAN.K.V. & OTHERS - 2008(7) SCC 428, Civil Appeal No.2291/2000 (United India Insurance Co. Ltd., Shimla Vs Tilak Singh & Others) disposed of on 04.04.2006 and NATIONAL INSURANCE CO. LTD. VS BALAKRISHNAN & ANOTHER - 2013 ACJ 199. He submits that the coordinate bench of this Court in MFA No.23798/2009 (Divisional Manager Vs Smt. Girija since deceased by LRs) disposed of on 28.10.2021, has differed from the view taken in MFA No.200966/2014 and MFA No.2643/2010 on the ground that the said judgments have been passed without taking note of the law laid MFA 24077/2009 -8- down by the Hon'ble Supreme Court in Sudhakaran's case supra. He submits that merely for the reason that additional premium has been deducted under the act policy, that alone will not cover the risk of third party unless it is proved that additional premium is paid to cover the risk of the third party. In this regard, he has relied upon the judgment of the coordinate bench of this Court in the case of THE BRANCH MANAGER, THE NEW INDIA ASSURANCE CO. LTD. VS MAHADEV PANDURANG PATIL & ANOTHER - ILR 2011 KAR 850. He submits that the compensation awarded by the Tribunal having regard to the nature of injuries and the treatment undergone by the claimant for the same, is just and proper and needs no interference. He submits that in any event, having regard to the fact that the offending vehicle is covered under the act policy, the Insurer cannot be held liable to pay the compensation amount to the claimant. Accordingly, he prays to dismiss the appeal.
7. The undisputed facts of the case are, that on 23.04.2005, the Hero Honda motor cycle bearing MFA 24077/2009 -9- registration No.KA-29/J-3910 which was duly insured with the respondent-Insurer had met with an accident and in the said accident, the claimant who was traveling as a pillion rider in the said motor cycle had suffered injuries. The Tribunal had absolved the liability of the Insurer to pay the compensation though the offending vehicle was duly insured by it as on the date of the accident on the ground that the policy issued was an act policy, and therefore, the risk of the pillion rider was not covered under the said policy.
8. The claimant was traveling as a pillion rider along with the owner of the offending motor cycle and admittedly no other vehicle is involved in the accident in question. Therefore, the claimant cannot be said to be a third party as sought to be contended by the learned Counsel for the claimant. Though the learned Counsel for the claimant has placed reliance on the decisions of the coordinate benches of this Court in MFA No.200966/2014 and M.F.A.No.2643/2010 supra, as rightly contended by the learned Counsel for the Insurer, the said judgments MFA 24077/2009
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have been passed by the coordinate benches of this Court without considering the judgment of the Hon'ble Apex Court in Sudhakaran's case, wherein it is held that under an act policy, the pillion rider cannot be considered as third party and the liability of the Insurer cannot be extended to a pillion rider unless it is proved that requisite amount of premium is paid to cover the risk of the pillion rider in a case where the accident in question had taken place owing to the rash and negligent driving of the owner/driver of the insured motor cycle.
9. Learned Counsel for the claimant has referred to the insurance policy at Ex.P-24 and has submitted that since the Insurer has collected an additional premium while renewing the insurance policy, the policy in question cannot be considered as an act policy, but a contractual policy. A perusal of the insurance policy available in the file would go to show that the seating capacity of the vehicle insured under the said policy is shown as 'two'. In addition to the premium of `160/- towards basic liability, a sum of `50/- is collected towards personal accident MFA 24077/2009
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cover for owner/driver and a further sum of `80/- is collected towards any extra loading. Though the learned Counsel for the Insurer has submitted that merely for the reason that the Insurer has collected additional premium it cannot be said that the same is collected towards covering the risk of the pillion rider, he has not given any satisfactory explanation to this Court as to for what purpose the amount of `80/- has been collected. In identical circumstances, the coordinate bench of this Court in a case where additional sum of `80/- was collected under the caption 'extra loading', has held in MFA No.4063/2009 supra, as under:
"2. On perusal of the policy as Ex.R.1, it is seen that apart from the basic premium, an additional sum of `80/- is also collected under the caption, "extra loading". Admittedly, the vehicle involved is a Kinetic Honda scooter and as such, the question of having any extra loading to the said vehicle does not arise and if at all, if the said amount is collected towards additional fixtures to the vehicle, the same would have been mentioned under the said heading. In the circumstances, the observations made by the tribunal at paragraph 12 MFA 24077/2009
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of the judgment that the said extra amount of `80/- collected is towards the coverage of the pillion rider, will have to be accepted.
3. In the foregoing circumstances, though policy is captioned, 'liability only policy', as the contents and also the collection of premium is on par with a package policy, it cannot be said that the appellant/insurance company is not liable to indemnify the owner of the vehicle. The Insurance Regulatory and Development Authority has clarified by passing a letter dated 16.11.2009 to all the Insurance Companies about liability of the insurer to indemnify the owner of the vehicle with regard to its liability in relation to the pillion rider in case of two wheelers and has referred to Circular No.MOT/GEN/10 dated 2nd June 1986 and has further stated that the said circular makes it clear that insured's liability in respect of pillion rider carried on two wheeler is covered under the Standard Motor Package Policy. Thus, the impugned judgment with regard to fastening of the liability is well-founded and the same does not call for any interference."
10. Similarly, in MFA No.8069/2007 supra, the coordinate bench of this Court in a case where the claim MFA 24077/2009
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petition was contested by the Insurance Company wherein the pillion rider was the claimant, on the ground that no additional premium was paid by the insured, and therefore, the Insurance Company is not liable to pay the compensation in the event an award is passed in favour of the claimant, this Court having observed that though the policy was an act policy, but it was seen from the policy, that an amount of `160/- was received towards extra loading under the policy, from the insured, and therefore, held that the pillion rider was covered under the said policy.
11. In Ningawwa's case supra, the following question was referred to the Full Bench of this Court.
"If it is shown the insurance policy is not 'Act' policy in terms of Sections 145 and 147 of the Motor Vehicles Act, but a contractual policy issued collecting extra premium indicating insurance company has enlarged its liability, will not the insurance company be liable to pay and recover even if there is any breach by the insurer?"MFA 24077/2009
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12. The Full Bench of this Court has answered the aforesaid question as under:
"Having regard to Section 149(1) r/w Section 149(7) whenever a case falls under Section 149(2)(a) and the same is successfully established or proved by the Insurance Company, as per the twin tests laid by the Hon'ble Supreme Court in Swaran Singh, nevertheless, the insurer or Insurance Company is liable to satisfy the award vis-à-vis a third party and is entitled to recover from the insured. This is irrespective of, the policy being an Act policy in terms of Section 147 pertaining to compulsory coverage of risks of third parties and other classes of persons stated therein or a policy covering other risks by specific contract being entered into in that regard and where additional premium is paid by the insured i.e., a contractual policy."
13. In Mahadev Pandurang Patil's case supra, the injured were inmates of a car and it was found that additional premium was collected by the Insurance Company for loading the risk of third party which was clearly stated in the policy issued in respect of the offending vehicle. It is under these circumstances, the MFA 24077/2009
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Division Bench of this Court had held that risk of inmates of the car was not covered under the said policy. But in present case, there is no explanation whatsoever offered by the Insurer for collection of additional premium. In Tilak Singh's case and Balakrishnan's case, the Hon'ble Apex Court has held that under the Act policy, the risk of pillion rider is not covered. Admittedly, in those two cases, the Insurer had not collected any additional premium under the Act policy. In Sudhakaran's case, where the policy issued covered the risk of third party and the risk of owner/driver of the insured vehicle, the Hon'ble Supreme Court held that the liability of the insurance company in a case of this nature is not extended to a pillion rider of the motor cycle unless the requisite amount of premium is paid for covering his/her risk. Therefore, it is evident that in a case where the Insurer has collected additional premium under the Act policy issued in respect of the motor cycle, the liability of the Insurer could be extended even in respect of a pillion rider of the motor cycle.
MFA 24077/2009
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14. In the case on hand, from the reading of the Insurance Policy issued by the Insurer, it is evident that extra premium has been collected by the Insurer and having regard to the fact that the offending vehicle is a two wheeler and separate amount of `50/- has been collected towards personal accident coverage of the owner/driver of the motor cycle in addition to the statutory payment of `160/- towards basic liability, the extra premium of `80/- collected by the Insurer is required to be considered as premium collected towards the coverage of the pillion rider when admittedly the seating capacity of the vehicle is mentioned as 'two' in the insurance policy. The insurer does not dispute collection of additional premium towards extra loading, but it has failed to explain for what purpose this additional premium is collected in respect of a two wheeler, and therefore, it can be safely presumed that the additional premium is collected to cover the risk of pillion rider. It is not the case of the Insurer that the owner/driver of the insured vehicle had violated any of the policy conditions, and therefore, MFA 24077/2009
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the question of pay and recover does not arise in this case. Under the circumstances, I hold that the Tribunal was not justified in saddling the liability to pay the compensation amount on the owner of the offending motor cycle and having regard to the fact that valid insurance policy was issued in respect of the offending vehicle by the Insurer, the Insurer is held liable to indemnify the owner of the offending vehicle.
15. In so far as the correctness of the compensation awarded by the Tribunal is concerned, it would be relevant to note that the claimant had suffered the following injuries in the accident in question.
i) Communited fracture of upper third of right tibia.
ii) other simple injuries.
16. The claimant was aged 42 years as on the date of the accident. The notional income of the claimant has been taken at `3,000/- per month and as rightly contended by the learned Counsel for the claimant, the same ought to have been taken at `3,500/- per month. MFA 24077/2009
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The doctor who has been examined as PW-2 has stated that the permanent disability suffered to the upper limb was 30%. Therefore, to the whole body, the permanent disability has to be considered as 10%. The proper multiplier applicable having regard to the age of the injured is '14'. In the said event, the claimant would be entitled for a sum of `58,800/- towards loss of earning capacity due to disability as against the amount of `37,800/- awarded by the Tribunal.
17. Towards medical expenses, the Tribunal has awarded a sum of `9,620/- and the same remains unaltered. Towards pain and suffering, the claimant is entitled for a total sum of `30,000/- as against `10,000/- awarded by the Tribunal. Towards incidental expenses, the claimant is entitled for a sum of `10,000/- as against `2,500/- awarded by the Tribunal. Towards loss of amenities, the claimant is entitled for a sum of `30,000/- as against `5,000/- awarded by the Tribunal. Towards loss of earning during laid-up period, the claimant is entitled for a sum of `10,500/-. Therefore, in all, the MFA 24077/2009
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claimant is entitled for a total compensation of `1,48,920/- which reads as under:
1. Loss of earning capacity due to `58,800/- permanent disability
2. Medical expenses `9,620/-
3. Pain and suffering `30,000/-
4. Incidental expenses `10,000/-
5. Loss of amenities `30,000/-
6. Loss of earnings during laid-up `10,500/-
period Total `1,48,920/-
18. The enhanced amount of compensation shall carry interest at 6% per annum from the date of petition till realization. Since respondent no.2-Insurer has been held liable to pay the compensation amount, respondent no.2- Insurer is directed to pay the entire compensation amount with interest before the Tribunal within a period of eight weeks from the date of receipt of certified copy of this judgment. The order passed by the Tribunal in so far as it relates to disbursement and deposit, etc., shall remain unaltered and the same would also be applicable to the MFA 24077/2009
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enhanced amount of compensation. The appeal is accordingly allowed in part.
Sd/-
JUDGE KK