Oriental Insurance Co. Ltd. vs Gangavarapur Padmawati And Ors. on 24 August, 1994

[Cites 25, Cited by 13]

Bombay High Court

Oriental Insurance Co. Ltd. vs Gangavarapur Padmawati And Ors. on 24 August, 1994

Equivalent citations: 1996ACJ45, 1995 A I H C 3184, (1996) 2 ACC 553, (1995) 2 CIVLJ 17, (1995) 1 MAH LJ 167, (1995) 1 TAC 671, (1996) ACJ 45

1. Taking exception to the award passed by the Motor Accidents Claims Tribunal, Yavatmal, on 9.12.1993 in Motor Accident Claim No. 4 of 1990, Gangavarapur Padmawati v. J. Ramchandra Reddy, whereby the learned Tribunal passed an award for a sum of Sub-clause 1,35,600/- together with interest at the rate of 12 per cent per annum from the date of claim petition, i.e., 10.1.1990 till realisation making the non-applicant Nos. 1 to 3 jointly and severally liable, the appellant, the Oriental Insurance Co. Ltd. (hereinafter referred to as 'the insurer') has filed this appeal under Section 173 of the Motor Vehicles Act, 1988.

2. Twofold contentions have been raised by Mr. D.N. Kukdey, the learned counsel for the insurer in this appeal-(i) that the liability on the insurer could not have been fastened in respect of the death of employee or representative of the owner of the goods who was travelling in the goods vehicle along with the goods, and (ii) that, in any case, the liability in the present case contractually accepted by the insurer was to the extent of Rs. 10,000/-per passenger and, therefore, the liability of the insurer was only limited to that extent. In support of his submissions, Mr. Kukdey, the learned counsel for the insurer, placed reliance on the Full Bench decision of the Karnataka High Court in National Insurance Co. Ltd. v. Dundamma .

3. Before we examine the two contentions of the learned counsel, briefly the undisputed facts of the case may be noticed which are also summarised by the insurer in synopsis of the appeal. On 5.10.1989 one G. Ramanna Reddy, aged 26 years, resident of Narasrao Peth, District Guntur (AP), was travelling in goods vehicle bearing No. AHT 7576 along with the goods of his employer, Palvedi Narsinha Rao. The goods being carried in the truck were onions. The said truck was being driven by G. Laxmaiyya Venketteiya, non-applicant No. 2 (hereinafter referred to as 'the driver'), rashly and negligently at fast speed and when the truck reached near Mama Bhasa Bridge, the truck dashed against the right parapet wall of the bridge as a result of which the parapet wall was broken and the truck turned turtle and fell in the river resting its cabin on the ground. Ramanna Reddy received multiple injuries and died, J. Ramchandra Reddy, non-applicant No. 1 (hereinafter referred to as 'the owner'), was owner of the said truck and the said vehicle was insured with the 'insurer' by a policy of insurance effective from 29.4.1989 to 28.4.1990. The respondent Nos. 1 to 4 herein who were claimants before the Tribunal (hereinafter referred to as 'the claimants') filed the claim petition before the Motor Accidents Claims Tribunal, Yavatmal, seeking a claim of Rs. 1,75,000 against the owner, driver and the insurer in favour of the claimants along with interest at the rate of 18 per cent per annum. The claimants averred in the claim petition that deceased Ramanna Reddy was employed on the salary of Rs. 1,000 per month and his monthly contribution to the family was Rs. 700/-. The deceased was a young man of 26 years. The wife claimed Rs. 25,000/- for the loss of consortium and for loss of association and a sum of Rs. 5,000/- by way of expenses to take the dead body of the deceased to his native place in taxi.

4. The owner despite service remained ex parte before the Tribunal. The driver admitted that he was driving the truck bearing No. AHT 7576 at the relevant time, but he denied that he was driving the vehicle rashly and negligently but submitted that the accident took place due to mechanical defect. Insurer also denied the material facts and also set up the defence that on the date of the accident, i.e., 5.10.1989, the deceased was travelling in the goods vehicle for collecting onions in Yavatmal district and he was travelling in the said truck for collection of onions of his master, viz., Palvedi Narsinha Rao. The above truck was insured with the insurer and as per the terms of the policy and premium taken, if carrying non-fare passenger the said truck meets with an accident, then the insurer had covered the risk to the extent of Rs. 10,000/- only for each passenger and, therefore, liability regarding payment of compensation arises against the insurer to the extent of Rs. 10,000/- only.

5. The learned Tribunal after recording the evidence, documentary as well as oral, by the parties and hearing the learned counsel for the parties held that deceased Ramanna Reddy died due to the accident of the aforesaid truck on account of rash and negligent driving by its driver. The Tribunal considered the question relating to quantum of compensation and held that the claimants are entitled to claim compensation of Rs. 1,35,600/- inclusive of the amount of Rs. 25,000/- paid to the claimants under no fault liability. On issue Nos. 4 and 5, the Tribunal held that insurer is liable to pay the said compensation to the claimants and its liability was held joint and several with the owner and the driver.

6. The findings recorded by the learned Tribunal that deceased Ramanna Reddy died in the accident of the vehicle No. AHT 7576 on 5.10.1989 while he was travelling in the said truck along with the onion bags as an employee of the owner of the goods, who was hirer of the truck, due to rash and negligent driving by the truck driver, have gone unchallenged. There is also no challenge to the finding about the quantum of compensation in this appeal filed by the insurer. The learned counsel has only challenged the finding of the Tribunal holding the insurer liable in view of the aforesaid contentions.

7. The aforesaid two contentions are that the Tribunal has erred in fixing the liability on the insurer for the death of Ramanna Reddy who was travelling in the goods vehicle as an employee or representative of the owner of the goods along with the goods and that in any case the liability contracted by the insurer per passenger was to the extent of Rs. 10,000/-and, therefore, at best the insurer was liable to the extent of Rs. 10,000/- only.

8. Both the contentions raised by the learned counsel for the insurer are devoid of any merit.

9. Section 2(8) of the Motor Vehicles Act, 1939 (hereinafter referred to as 'the Act of 1939'), defines 'goods vehicle' to mean any motor vehicle constructed or adapted for use for the carriage of goods, or any motor vehicle not so constructed or adapted when used for the carriage of goods solely or in addition to passengers. According to Section 2(25) of the Act of' 1939, 'public service vehicle' means any motor vehicle used or adapted to be used for the carriage of passengers for hire or reward and includes a motor cab, contract carriage and stage carriage. 'Transport vehicle' under Section 2(33) of the Act of 1939 means a public service vehicle or a goods vehicle.

10. Section 42(1) of the Act of 1939 makes a provision that no owner of a transport vehicle shall use or permit the use of the vehicle in any public place ('whether or not such vehicle is actually carrying any passenger or goods') save in accordance with the conditions of a permit granted or countersigned by a Regional or State Transport Authority or the Commission authorising the use of the vehicle in that place in the manner in which the vehicle is being used subject to the conditions specified in the permit relating to stage carriage or contract carriage. Sub-section (2) of Section 42 of the Act of 1939 provides the guidelines for determining, for the purpose of Chapter IV, whether transport vehicle is or is not used for the carriage of goods for hire or reward.

11. Section 68 of the Act of 1939 empowers the State Government to make rules for the purpose of carriage of persons other than the driver in the goods vehicle. Section 68(2)(m) of the Act of 1939 provides that the State Government may frame rules regarding the conditions subject to which goods may be carried on stage and contract carriages partly or wholly in lieu of passengers.

12. It would not be out of place to observe that though a goods vehicle is a vehicle constructed or adapted for use for the carriage of goods or a vehicle not so constructed or adapted when used for the carriage of goods, but that may be solely or in addition to the passengers and thus, the definition of 'goods vehicle' does contemplate the carriage of passengers. Carriage of goods is the preliminary use and purpose of the goods vehicle, but incidentally or as incident thereof the goods vehicle may also carry passengers subject to the conditions of permit. In contradistinction to the goods vehicle, public service vehicles are primarily intended to carry passengers, but incidentally they may also carry goods or luggage belonging to the passengers. Bombay Motor Vehicles Rules, 1959, have been framed by the State Government in exercise of its powers under Section 68 of the Act and Sub-section18 of the said rules provides as under:

118. Carriage of persons in goods vehicles.-(1) Subject to the provisions of this rule, no person shall be carried in a goods vehicle:

Provided that the owner or the hirer or a bona fide employee of the owner or the hirer of the vehicle carried free of charge or a police officer in uniform travelling on duty may be carried in a goods vehicle, the total number of persons so carried (i) in light transport goods vehicle having registered laden weight less than 990 kg., not more than one; (ii) in any other light transport goods vehicle, not more than three; (iii) in any goods vehicle other than light transport vehicle, not more than seven.

(2) Notwithstanding anything contained in Sub-rule (1), but subject to the provisions of Sub-rules (4) and (5) a Regional Transport Authority may by an order in writing permit that a larger number of persons may be carried in the vehicle on the conditions that no goods at all are carried in addition to such persons and such persons are carried free of charge in connection with the work for which the vehicle is used and that such other conditions as may be mentioned by the Regional Transport Authority are observed and where the vehicle is required to be covered by a permit, the conditions of the permission aforesaid are also made conditions of the permit.

(3) to (6) xxx xxx xxx

13. Section 95 of the Act of 1939 which is relevant for the present purpose reads as under:

In order to comply with the requirements of this Chapter, a policy of insurance must be a policy which-

(a) xxx xxx xxx

(b) insures the person or classes of persons specified in the policy to the extent specified in Sub-section (2)-

(i) against any liability which may be incurred by him in respect of the death of or bodily injury to any person or damage to any property of a third party caused by or arising out of the use of the vehicle in a public place;

(Emphasis supplied)

(ii) against the death of or bodily injury to any passenger of a public service vehicle caused by or arising out of the use of the vehicle in a public place:

provided that a policy shall not be required-

(i) to cover liability in respect of the death, arising out of and in the course of his employment, of the employee of a person insured by the policy or in respect of bodily injury sustained by such an employee, arising out of and in the course of his employment other than a liability arising under the Workmen's Compensation Act, 1923, in respect of the death of, or bodily injury to, any such employee-

(a) engaged in driving the vehicle, or

(b) if it is a public service vehicle, engaged as a conductor of the vehicle or in examining tickets on the vehicle, or

(c) if it is a goods vehicle, being carried in the vehicle, or

(ii) except where the vehicle is a vehicle in which passengers are carried for hire or reward or by reason of or in pursuance of a contract of employment, to cover liability in respect of the death of or bodily injury to persons being carried in or upon or entering or mounting or alighting from the vehicle at the time of the occurrence of the event out of which a claim arises...

14. In Nasibdar Suba Fakir v. Adhia and Company 1983 ACJ 264 (Bombay), the question of law related to-

(a) the interaction of the provisions of Section 95(1)(b), Motor Vehicles Act and of Rule 118 of the Bombay Motor Vehicles Rules, and

(b) their impact on the liability of the insurance company for the death of or bodily injury to the hirer of a goods vehicle when he is a passenger in the same vehicle.

The Division Bench after referring to the relevant provisions of law and the various decisions of the different High Courts held as under:

We are of the view that the better view as between the two sets of authorities is the one to which we have arrived upon the analysis of the statutory provisions. We are of the view that when a hirer of a goods vehicle for carriage of his goods is travelling by the said vehicle in connection with the carriage of the goods with the consent of the driver or owner of the goods vehicle in question, he must be deemed to be a passenger on the vehicle for reward within the meaning of Clause (ii) of the proviso to Section 95(1) of the Act and hence the tortious liability of the owner towards him must be covered by the insurance policy contemplated by the said section.

15. Another Division Bench decision of this court consisting of P.B. Sawant (as he then was) and Kolse Patil, JJ. in the case of Ragunath Eknath Hivale v. Shardabai Karbhari Kale 1986 ACJ 460 (Bombay), held as under:

(7) What was argued on behalf of the appellant on the basis of the above Sub-clause was that the truck in question was insured as a vehicle used for carrying goods on hire. It had a permit to ply for hire for the purpose of carrying goods. There was, therefore, no breach of any condition specified in the policy and hence the insurance company cannot be exempted from its absolute liability created by Sub-section (1) of Section 96. As against this, the argument of the insurance company was that although the permit issued to the truck was only for carrying goods, it was, at the relevant time, admittedly carrying passengers also. The number of persons that a goods vehicle is permitted to carry is governed by Rule 118 and the present vehicle being not a light transport vehicle, it could not have carried more than seven persons under the said rule. At the relevant time, admittedly the vehicle was carrying about 15 to 16 persons. Hence, the truck was being run in breach of the permit issued to it to ply it as a goods vehicle. The further argument on behalf of the insurance company was that by carrying persons in excess of seven, the owner had also committed a breach of the contract of insurance since the conditions on which the insurance policy was issued had prohibited the use of the truck for a purpose other than for carrying the goods. It was, therefore, contended that Clause (b)(i)(a) as well as Clause (b)(i)(c) of Section 96(2) were directly contravened and the insurance company was not liable to pay the compensation.

(8) We are inclined to negative the contentions of the insurance company on the following grounds. It is true that at the relevant time, the truck was carrying about 15 to 16 persons in addition to the goods for carriage of which alone the permit was issued to ply it. However, it must not be lost sight of that under the said Rule 118, even a goods vehicle is permitted to carry persons though up to seven in number. Those persons include the owner or the hirer of the vehicle. The only condition for carrying such persons is that they have to be carried free of charge. Hence, even if a vehicle has a permit only for carrying goods, the carrying of persons is not prohibited absolutely. The evidence on record admittedly shows that the passengers in question were the owners of the goods, i.e., the hirers of the vehicle. It is nobody's case that they were charged any fare. The only condition of the permit which was breached was that the persons in question were in excess of the number permitted by the rule. This was a breach of the condition of the permit issued for plying the vehicle. The vehicle was, however, being used essentially for carrying the goods. It cannot, therefore, be said that the vehicle was not being used for the purpose for which the permit was issued. A breach of the condition of the permit is not the same thing as the breach of the purpose for which it is issued. The contravention of one or the other condition of the permit is not a contravention of the purpose for which the permit is issued. There was, therefore, no contravention either of Clause (b)(i)(a) or of Clause (b)(i)(c) of Section 96(2) which clauses alone are and can be pressed into service on behalf of the insurance company."

16. In Ragunath's case, 1986 ACJ 460 (Bombay), this court, thus, held that even if the vehicle has a permit only for carrying goods, the carrying of persons is not prohibited absolutely.

17. Though the opinion of the various High Courts on the question as to whether the liability can be fastened on the insurer of the goods vehicle for the death of or injury to the owner of the goods or the employee of the owner of goods being carried in the goods vehicle along with the goods is not uniform and, on the other hand, virtually divergent, the preponderance of the opinion of the various High Courts appears to be in favour of the view that if the owner of the goods or employee of the owner of the goods travels in the goods vehicle along with his goods for hire or reward, the tortious liability of the owner is required to be compulsorily covered by the insurance policy and accordingly, the insurance company is liable. The Full Bench of Rajasthan High Court in Santra Bai v. Prahlad 1985 ACJ 762 (Rajasthan), has held that in case of passengers' carriage for hire or reward or by reason of or in pursuance of contract of employment in any vehicle, the insurance company is liable and this will include the owner of the goods as well as his employees.

18. The view of the Allahabad High Court in Abdul Razaq v. Sharifunnisa 1984 ACJ 44 (Allahabad), is also that the insurance company is liable for the death of or injury to the hirer or an employee of the hirer of the goods vehicle.

19. In Oriental Fire and General Ins. Co. Ltd. v. Narayani Bai 1984 ACJ 106 (Orissa), the Division Bench of the Orissa High Court expressed its agreement with the view of the Division Bench of this court in Nasibdar's case, 1983 ACJ 264 (Bombay) and held as under:

In the case of Nasibdar Suba Fakir v. Adhia and Company 1983 ACJ 264 (Bombay), a Division Bench of the Bombay High Court interpreted the expression 'vehicle in which passengers are carried for hire or reward' occurring in Clause (ii) of the proviso to Clause (b), Sub-section (1) of Section 95 and held that when the owner of the goods enters into a contract of carriage of goods the contract is of a composite character. The contract is not for carriage of goods, the contract is for safe and convenient transport of the goods from the beginning till the end and the process of contract involves loading and unloading and safe carriage. The consideration which is paid by the owner of the goods for the transport of the goods is a composite consideration. It is a consideration for the transport of goods as well as for the incidental transport of the passengers accompanying the goods. Once it is accepted that the consideration paid by the owner of the goods included the consideration for his own carriage, it cannot be said that he was not carried in the vehicle for reward at the relevant time. Upon such findings, their Lordships held as follows:

... We are of the view that when a hirer of a goods vehicle for carriage of his goods is travelling by the said vehicle in connection with the carriage of the goods with the consent of the driver or owner of the goods vehicle in question, he must be deemed to be a passenger on the vehicle for reward within the meaning of Clause (ii) of the proviso to Section 95(1) of the Act and hence the tortious liability of the owner towards him must be covered by the insurance policy contemplated by the said section.

20. The Andhra Pradesh High Court in Meesala Suryanarayana v. Goli Satyavathi 1979 ACJ 513 (AP), has also laid down that if owner of the goods carried in the goods vehicle dies as a result of the accident of goods vehicle, the insurance company cannot escape the liability and rather the insurance company is liable to pay compensation.

21. In New India Assurance Co. Ltd. v. K.T. Jose , the Division Bench of Kerala High Court after considering the entire relevant provisions of the Motor Vehicles Act and the decisions of the various High Courts held that for the injury caused to the owner of the goods travelling along with his goods, the insurance company is liable. The Kerala High Court also relied on the Division Bench judgment of this court in Nasibdar's case, 1983 ACJ 264 (Bombay) and held as under:

(14) The statutory requirement is that the policy of insurance must be a policy issued by an authorised insurer. It should insure the person or class of persons specified in the policy to the extent specified in Sub-section (2) of Section 95 against liabilities referred to in Sub-clause s (i) and (ii) of Clause (b) of Sub-section (1) of Section 95. Sub-clause (i) deals with the liability which may be incurred by insured in respect of the death of or bodily injury to any person or damage to any property of a third party, caused by or arising out of the use of the vehicle in a public place. The liability arising under Sub-clause (ii) is against the death of or bodily injury to any passenger of a public service vehicle, caused by or arising out of the use of the vehicle in a public place. Death or bodily injury may be to any person while damage to property must be of a third party. It is clear that in the case of death or bodily injury, it may be to any person. This would naturally include third parties in the strict sense of the word, passengers in other vehicles involved in the accident as also employees of the insured or of the owner of the goods being carried in the vehicle insured and certain categories of passengers. Passengers of public service vehicles are separately dealt with in Sub-clause (ii). Therefore, Sub-clause (i) cannot be taken to include passengers in public service vehicles. In Sub-clause (i) there is no restriction regarding the persons or nature of the vehicle, while Sub-clause (ii) deals with passengers of public service vehicles. We hold that Sub-clause (i) of Clause (b) of Section 95(1) lakes in liability incurred by the insured in respect of the death of or bodily injury to any person including passengers in goods vehicle also. This is the view taken in Channappa Chanavirappa Ketti v. Laxman Bhimappa Bajentri ; Nasibdar Suba Fakir v. Adhia and Company 1983 ACJ 264 (Bombay) and Santra Bai v. Prahlad 1985 ACJ 762 (Rajasthan).

The Division Bench further observed:

(17) We have already indicated that law countenances passengers travelling in the goods vehicle. The owner of the goods carried in a goods vehicle or his employee or his agent can be permitted to travel in the goods vehicle. While doing so they cannot be travelling gratuitously. The owner of the goods pays hire for the goods vehicle to carry his goods. Where it becomes necessary for him to travel in the goods vehicle for the purposes of loading, unloading or taking care of the goods, the contract between him and the owner of the vehicle must necessarily imply permission for him or his agent to travel in the vehicle. This implied condition would also have been taken into consideration in fixing the hire. Hence it is clear that owner of the goods travelling in a goods vehicle is a passenger for hire and, therefore, his case is covered by the exception to the second proviso. In any view of the case, he must be regarded as a passenger travelling in the vehicle for reward. It has been argued before us that owner of the goods must also be taken to be a passenger travelling in the vehicle by reason of or in pursuance of contract of employment. No doubt, the expression 'employment' would ordinarily mean engaging a person in service. Concise Oxford Dictionary explains the word 'employ' as 'use thing or one's power, time' and the word 'employment' as 'one's regular trade or profession'. One may engage a lorry for conveying goods. It can also be said that one employs a lorry for conveying goods. It is unnecessary to pronounce on this aspect. In either view, the insured is compulsorily liable to take out an insurance policy against any liability in respect of the death of or bodily injury to the owner of the goods travelling in the lorry. Hence under an 'Act policy' the insurer is liable to indemnify in regard to such a liability.

22. The Andhra Pradesh High Court in yet another decision, Oriental Fire and Genl. Ins. Co. Ltd. v. Matta Chandra Rao 1987 ACJ 174 (AP), dealt with the liability of the insurer relating to the death of or bodily injury to the employees of the owner of the goods as under:

(ii) Employees of the owner of the goods.

(38) This class of persons has been held covered by the Act policy for various reasons. Construing the words 'by reason of or in pursuance of a contract of employment', in the similar provision in England in lzzard v. Universal Insurance Co. 1937 AC 773, Lord Wright observed:

The words of the statute are general and unlimited. To insert the words 'with the insured person' would be to insert words of specific limitation beyond what can be inferred from the general tenor of the Act or policy'. and it was held that these words in the statute or the similar words in the policy have to be widely construed and that the contract of employment may not only be with the owner of the vehicle but even with a 'third party'. Thus, if the persons carried are employees of a third party who has hired the vehicle, they will be covered by the Act policy and. the insurance company will be liable.

(39) A similar view has been taken by various High Courts. The Madras, Orissa, Madhya Pradesh in Vanguard Insurance Co. Ltd. v. Chinnammal 1969 ACJ 226 (Madras), in National Insurance Co. Ltd. v. Laxmi Devi 1985 ACJ 48 (Orissa) and in Hukam Chand Insurance Co. Ltd. v. Badruddin 1980 ACJ 164 (MP), have held that the Act policy in Clause (ii) of the proviso to Section 95(1)(b) covers the liability of the insurance company in respect of the employees of the hirer or owner of the goods. There does not appear to be any direct case of our High Court but I am in agreement with the view taken by the above High Courts. In fact, the above interpretation is the starting point for the discussion under the next heading.

(40) Of course, the Rules in Bombay and Karnataka vide Nasibdar Suba Fakir v. Adhia and Co. 1983 ACJ 264 (Bombay) and Channappa v. Laxman , also permit such employees of the hirer to be carried up to a limit. That the employees of the hirer are also covered is accepted incidentally by the Kerala, Gujarat and Rajasthan High Courts (though the point did not directly arise) in the cases referred under the previous heading. It is held that the owner of goods has a right or need to put his employees on board for loading, unloading or to keep them safe. Thus, in respect of the employees of the owner of the goods or of the hirer, the insurance company is liable under the Act policy.

23. Andhra Pradesh High Court, thus, also relied on the Division Bench judgment of this court in Nasibdar's case, 1983 ACJ 264 (Bombay) and observed that the Rules in Bombay Motor Vehicles Rules also permit such employees of the hirer to be carried up to the limit and the employees of the hirer are also covered. In our view, also for the same reasons, the insurer isliable to pay compensation if the employee of the owner of the goods travels in the goods vehicle along with his employer's goods for hire or reward and tortious liability of the owner is required to be compulsorily covered by the insurance policy and if the terms of the insurance policy are otherwise, the same cannot be given effect to in view of the specific provisions contained in Section 96(3) of the Act of 1939 which provides that where a certificate of insurance has been issued under Sub-section (4) of Section 95 to the person by whom a policy has been effected, so much of the policy as purports to restrict the insurance of the persons insured thereby by reference to any conditions other than those in Clause (b) of Sub-section (2) shall, as respects such liabilities as are required to be covered by a policy under Clause (b) of Sub-section (1) of Section 95, be of no effect, provided that any sum paid by the insurer in or towards the discharge of any liability of any person which is covered by the policy by virtue only of this Sub-section shall be recoverable by the insurer from the person.

24. In the present case, it is admitted by the insurer that deceased was travelling in the truck No. AHT 7576 along with his employer's goods, viz., onions of his employer, Palvedi Narsinha Rao. The deceased Ramanna Reddy was thus travelling in the said truck as an employee of the hirer of the goods vehicle. The tortious liability of the owner of the goods vehicle AHT 7576, thus, was required to be compulsorily covered by the insurance policy and any term and condition in the policy of the insurance in contravention or contrary to the provisions of the Act of 1939 was of no effect and the insurer could not escape its liability by referring to those terms and conditions. The argument of Mr. Kukdey, learned counsel for the insurer, that the insurance company has contracted to cover the risk only to the extent of Rs. 10,000/- is thus misconceived. Clause referred to by the learned counsel in the policy of insurance under the heading, 'Liability to Public Risk' for limits of liability to authorised non-fare paying passengers as per Endorsement IMT 14(b) (Total number of authorised non-fare paying passengers),-Limit any one passenger Rs. 10,000/-,-Limit any one accident Rs. 50,000/-, has no application in the facts and circumstances of the present case. Under the said insurance policy, the insurer has undertaken its liability to the extent it is necessary to meet the requirements of the Motor Vehicles Act, 1939 and the liability of the insurer under the provisions of the Act of 1939 at the time of issuance of policy was Rs. 1,50,000/-and though at the time of accident on 5.10.1989 the Motor Vehicles Act of 1988 had come into force with effect from 1.7.1989, but Sub-section (2) of Section 147 of the Motor Vehicles Act, 1988, provided that the policy of insurance so issued shall continue to be effective for a period of four months after the commencement of this Act or till the date of expiry of such policy, whichever is earlier and, therefore, since the accident had taken place within four months of coming into force of the Motor Vehicles Act, 1988, the policy which was issued under the Act of 1939 was operative at the time and date of accident.

25. We, therefore, negative the contention of the learned counsel for the insurer that the liability of the insurer was limited to the extent of Rs. 10,000/- only.

26. Now, a word about the Full Bench decision of the Karnataka High Court in National Insurance Co. Ltd. v. Dundamma , which has been strongly relied upon by the counsel for the insurer. It may be observed at the outset that the facts in Dundamma's case (supra) were entirely different inasmuch as in the said case about 15 passengers who were strangers not carrying goods were travelling in the truck which met with the accident and it did not relate to the death of or bodily injury to the owner of the goods or employee of the owner of the goods being carried in the goods vehicle for hire or reward though the question referred to the said Full Bench was whether by force of Clause (ii) of proviso to Section 95(1)(b) of the Act of 1939 the insurance company is liable to pay compensation in respect of death of or bodily injury to any person travelling in a vehicle though it is not the vehicle constructed and adapted and meant in law for carrying passengers for hire or reward even to the extent of number of passengers permitted to be carried in the vehicle though not for hire or reward, even in the absence of any extra coverage secured by the owner under the policy concerned in respect of such passengers. The Full Bench of the Karnataka High Court noted the divergent opinion of the different High Courts and disagreed with the view of the Allahabad, Rajasthan and Kerala High Courts and also with the view of this court in Nasibdar's case, 1983 ACJ 264 (Bombay). We find that the view of the Division Bench of this court in Nasibdar's case (supra) and the view of other High Courts taking the same view is more justified and consensus of more High Courts is in favour of the view that if the owner of the goods or the employee of owner of the goods travels in the goods vehicle along with his goods for hire, or reward, tortious liability of the owner of the goods vehicle is required to be compulsorily covered by the insurance policy and the insurance company should be made liable, is more justified. We, therefore, express our disagreement with the view of the Karnataka High Court in Dundamma's case (supra) and follow the view of this court in Nasibdar's case (supra) and the view of the Allahabad, Rajasthan, Kerala, Orissa and Andhra Pradesh High Courts taking the same view. It may also be observed that in Dundamma's case (supra) also the Full Bench of the Karnataka High Court applied the principles of stare decisis regarding the liability of the insurance company in respect of owner of goods travelling in a goods vehicle with his goods by observing that the insurance company has been made liable for the last nearly 12 years and, therefore, held that the liability of the insurance company would continue in respect of owner of the goods travelling in goods vehicle with his goods.

27. We, therefore, find that the Claims Tribunal has rightly fastened the liability on the insurer for the death of Ramanna Reddy who was travelling in the goods vehicle, bearing No. AHT 7576, insured with the insurer, along with the goods as an employee of the hirer of the said goods vehicle.

28. Consequently, there is no merit in this appeal filed by the insurer. The appeal is, thus, dismissed in limine.

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