Madras High Court
The Thanjavur Taxi Drivers Industrial ... vs M. Vasantha And 7 Ors. on 30 September, 1997
Equivalent citations: 1997(3)CTC371, 1998 A I H C 2529, (1998) 1 MAD LW 665 (1997) 3 CTC 371 (MAD), (1997) 3 CTC 371 (MAD)
ORDER R. Balasubramanian, J.
1. C.M.A.No. 50 of 1988 is directed against M.C.O.P.No.64 of 1985. C.M.A.No.51 of 1988 is directed against M.C.O.P.No.9 of 1985. There were totally three claim petitions namely O.P.212 of 1984, O.P.9 of 1985 and O.P.64 of 1985 on the file of the Motor Accidents Claims Tribunal - District Judge, West Thanjavur at Thanjavur. There is no appeal against the award passed in O.P.No.212 of 1984 and this Court is now concerned only with the award passed in O.P.No.9 of 1985 and O.P.No.64 of 1985. The claimant in M.C.O.P.No.9 of 1985 and the legal representatives of the deceased Mohan (O.P No. 64 of 1985) have filed the claim petitions. The accident that took place on 20.7.1983 at 3.00 p.m. in a place called Alagaputhur in Nagapattinam-Kumbakonam main road involving a goods vehicle-van bearing No. TNZ 6119 is the cause of action for the two claim petitions above referred to. The van belonged to one Jothi who appeared as the first respondent in O.P.No.64 of 1985. He was a hirer of the vehicle under a hire purchase agreement with the third respondent in both the claim petitions. The vehicle was insured with the second respondent in both the claim petitions. O.P.No.9 of 1985 was filed claiming a compensation of Rs. 25,000 whereas only Rs. 5,000 was awarded. In O.P.No.64 of 1985, the claim petition was filed for a sum of Rs. 1,65,000, whereas only a sum of Rs. 58,000 was awarded. The claim petitions were opposed by the Insurance Company mainly on the ground that the claimant in O.P.No.9 of 1985 and Mohan, who died in the accident out of which, the other claim petition arose, were unauthorised passengers in a goods van and therefore, the insurance company need not cover their risk. On this basis, it was contended by them that they cannot be made liable at all for any amount that may be awarded by the Tribunal in the above two claim petitions.
2. As already stated, there was another claim petition namely O.P.No. 212 of 1984 in which the claimant was the cleaner of the van in question. An issue was also raised before the Tribunal that the insured is not the owner of the vehicle. However in all the three claim petitions the Tribunal found that the insured is the owner of the vehicle. However, in O.P.No.9 of 1985 and in O.P. 64 of 1985 the Tribunal accepted the defence that the injured and the deceased in the respective cases were unauthorised passengers in the goods vehicle and therefore, they cannot be fastened with any liability at all. Under these circumstances, the award amount referred to above came to be passed only against the owner of the vehicle. The correctness of the awards referred to above imposing personal liability on the owner of the vehicle is questioned in these two appeals by the owner.
3. I heard Mr. T.P. Manoharan, learned counsel for the appellant in both the cases, Mrs. Kala Ramesh learned counsel appearing for the third respondent in C.M.A. No. 50 of 1988 and Mr. K.S. Narasimhan, learned counsel appearing for the fifth and the third respondent in C.M.A. Nos. 50 and 51 of 1988 respectively as well as Mr S. Shanmugavelayudham learned counsel for the other respondents. Till recently, on the admitted facts of these cases, whenever the injured or the deceased in a motor vehicle accident case is found to be a fare-paying or non-fare-paying passenger in a goods vehicle or the owner of a, goods vehicle travelling along with the goods in a goods vehicle, it has always been held that such a risk need not be covered by the Insurance Company and consequently the Insurance Company was always exonerated. However, there appears to be a change in the line of thinking whenever such incidents are brought to the notice of the courts.
4. Mr. T.P. Manoharan, learned counsel appearing for the appellant in both the cases brought to my notice the judgment of the Supreme Court reported in Skandia Insurance Co. Ltd. v. Kokilaben Chandravadan, AIR 1987 SC 1184 wherein it had been held as follows:
"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 apromisor's contractual obligations. For example, in Glynn v. Margetson & Co., 1893 AC 351 (357), Lord Halsbury L.C. stated: It seems to me that in construing this document, which is a contract of carnage 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 Atlantique Societe D' Armement Martime 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."
5. Another judgment of the Supreme Court was also brought to my notice by the learned counsel appearing for the appellant and it is reported in B.V. Nagaraju v. Oriental Insurance Co. Ltd., Hassan, , wherein the Supreme Court has stated as follows:
"... 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 events, 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."
6. In another judgment of the Supreme Court reported in Sohan Lal Passi v. P. Sesh Reddy, laid down the, law under what circumstances, the Insurance Company can be exonerated on similar facts and the Hon'ble the Supreme Court stated as follows:
"The crucial test is whether the initial act of the employee was expressly authorised and lawful. Then the employer shall nevertheless be responsible for the manner in which the employees that is, the driver and the cleaner/conductor executed the authority. This is necessary to ensure so that the injured third parties who arc not directly involved or concerned with the nature of authority vested by the master to his servant are not deprived from getting compensation. If the dispute revolves around the mode or manner of execution of authority of the master by the servant, the master cannot escape the liability so far third parties are concerned on the ground that he had not actually authorised the particular manner in which the act was done. In the present case the accident took place when the act authorised was being performed in a mode which may not be proper but nonetheless it was directly connected within the course of employment. It was not an independent act for a purpose which had no nexus or connection with the business of the appellant so as to absolve the appellant from the liability. The appellant had authorised the driver to drive the vehicle but the driver allowed the cleaner/conductor who was also the employee of the appellant to drive the vehicle because of which the accident took place. It is not the stand of the appellant that the clearner/conductor was driving the vehicle without the knowledge or consent of the driver, for his personal pursuit. He was driving the bus for the business of the appellant, that is to carry the passengers. In this background, the appellant cannot escape the liability so far the third parties are concerned on the ground that he had not actually authorised the particular manner in which the act was done. As it has been established that the negligent act of the driver and the cleaner/conductor was "in the course of employment", the appellant shall be liable for the same."
7. Following the above referred to judgment of the Supreme Court, a Division Bench of this court consisting of the Honourable the Chief Justice and Justice Mr. A.R. Lakshmanan, J. held in a judgment reported in Kanniappa Nadar v. Jayapandi and 10 others, that the Insurance Company cannot be allowed to escape on circumstances which are similar to the facts on hand.
8. Under these circumstances, all the judgments referred to above are helpful to the cause advanced by the learned counsel for the appellant in each of these appeals. As far as the quantum of compensation is concerned, no argument is advanced by the learned counsel for the appellant nor is there any cross objection at the instance of the claimants. However, Mr S. Shanmugavelayudham, learned counsel appearing for the claimants in these two claim petitions brings to my notice that the Tribunal had awarded interest only at 9% p.a. This is patently erroneous. The claimants in each of these cases are entitled to interest at 12% p.a. from the date of the petition till the date of realisation. Therefore I am inclined to accept the arguments advanced by the learned counsel for the appellant in each of these appeals. Accordingly the appeals are allowed. The judgment and decree dated 26.8.1987 in M.C.O.P. Nos. 9 of 1985 and 64 of 1985 on the file of the Motor Accidents Claims Tribunal District Judge, West Thanjavur at Thanjavur so far as the personal liability imposed on the third respondent in each of the claim petitions are set aside as well as the interest awarded at 9% p.a. Instead, the award passed in both the claim petitions shall carry interest at 12% from the date of petition till the date of realisation and it has to be satisfied by the second respondent in each of those claim petitions namely the Insurance Company as the insurer of the vehicle belonging to the third respondent in those proceedings. There will be no order as to costs in these appeals. Connected C.M.Ps. are dismissed.