Karnataka High Court
Irshad S/O Buddesab Bahaddurbhai vs Mahamadali S/O Hasimsab Bahaddurbhai on 4 June, 2020
Author: V.Srishananda
Bench: V. Srishananda
IN THE HIGH COURT OF KARNATAKA,
DHARWAD BENCH
DATED THIS THE 4TH DAY OF JUNE 2020
BEFORE
THE HON'BLE MR. JUSTICE V. SRISHANANDA
M.F.A. NO.22262/2009 (MV)
BETWEEN:
IRSHAD,
S/O BUDDESAB BAHADDURBHAI
AGE : 33 YEARS, OCC COOLIE/HAMALI
R/O: MUNAVALLI, TQ SAUNDATTI,
DIST: BELGAUM.
...APPELLANT
(BY SRI.: H.M. DHARIGOND, ADV.)
AND:
1. MAHAMADALI
S/O HASIMSAB BAHADDURBHAI
AGE: MAJOR, OCC: BUSINESS,
R/O: JIDDI ONI, MUNAVALLI,
TQ SAUNDATTI, DIST BELGAUM
2. NATIONAL INSURANCE CO LTD
BRANCH OFFICE APMC YARD
SAUNDATTI, TQ SAUNDATTI
THROUGH THE DIVISIONAL OFFICE
NATIONAL INSURANE CO LTD
DIVIIONAL OFFICE RAMDEV GALLI,
BELGAUM-DIST, BELGAUM.
... RESPONDENTS
(BY SRI. M.Y. KATAGI, ADV. R2,
R1 - SERVED.)
THIS MFA IS FILED UNDER SECTION 173(1) OF MV
ACT, AGAINST THE JUDGMENT AND AWARD DATED:
09.04.2009 PASSED IN MVC NO.603/2005 ON THE FILE OF
2
THE ADDITIONAL MACT, SAUNDATTI, PARTLY ALLOWING
THE CLAIM PETITION FOR COMPENSATION AND SEEKING
ENHANCEMENT OF COMPENSATION.
THIS APPEAL COMING ON FOR HEARING, THIS DAY,
THIS COURT DELIVERED THE FOLLOWING:
JUDGMENT
Being not satisfied with the award of compensation of Rs.1,64,500/- by the impugned award and judgment passed by the Additional MACT, Saundatti, in MVC No.603/2005, dated 09.04.2009 the sole claimant has preferred this appeal before this court for enhancement of compensation.
2. The brief facts which are necessary to dispose of the appeal are as under:
The claimant had been to Saundatti in a 407 Tempo vehicle bearing No.KA-24-2636 on 22.04.2004 as a hamal along with his relative to unload the banana. After unloading the banana, he was returning the Munavalli in the same vehicle and the driver of the said vehicle drove the vehicle in a rash and negligent manner and as such, the vehicle toppled down on the left side of 3 the road near Munavalli village and in the said incident, the claimant- petitioner suffered grievous injuries.
3. It is further contended that the claimant-
petitioner was shifted to Dr. Naik's Hospital, Munavalli and he has spent Rs.1,00,000/- towards medical expenses and he was earning Rs.4,000/- per month as hamal and he was the sole bread earner and he has suffered permanent physical disability, as such, he has filed the claim petition before the tribunal for compensation.
4. Notice were ordered by the tribunal and in pursuance of the same, respondent Nos.1 and 2 have appeared and filed written statement denying the petition averments. While owner of the vehicle denied the rash and negligent driving of the driver, the insurance company denied the liability stating that the claimant-
claimant- petitioner was unauthorized passenger in the goods vehicle.
5. The claimant- petitioner lead his evidence by examining himself as PW1 and examined two witnesses 4 on his behalf as PW2 and 3. The claimants also relied on documentary evidence which are marked as Ex.P1 to 12.
On behalf of the Insurance company, the Administrative Officer got examined as RW1 and got marked the documentary evidence as Ex.R1 to R3.
6. Tribunal after considering the entire material on record and after hearing the parties, allowed the claim petition by awarding compensation at Rs.1,64,500/- as under :
1 Pain and sufferings 25,000/-
2 Medical expenses 39,500/-
3 Loss of amenities of life 20,000/- 4 Loss of earning to the extent 46,000/-
of disability 5 Loss of expectation of life 20,000/- 6 Conveyance, attendant 5,000/-
charges, food and
nourishment
7 Loss of income during laid off 9,000/-
period
Total 1,64,500/-
5
7. The tribunal however noted that the
Insurance company is not liable to pay the compensation by accepting contentions urged on behalf of Insurance company that the claimant-petitioner was an unauthorized passenger traveling in the goods vehicle.
8. Respondent No.1 is served and remained absent in this appeal.
9. The learned counsel for the appellant vehemently contended that the finding of the tribunal in assessing the income of the claimant at Rs.3,000/- is incorrect since the accident that has taken place in the year 2004-05, as this court and in Lok Adalath normally assess the monthly income at Rs.3,500/- notionally.
Therefore, on that ground he is entitled for enhancement of compensation.
10. Further, the learned counsel for the appellant contended that the even though the liability is fastened on the first respondent i.e., owner of the vehicle, in view of the recent judgment of the Hon'ble High Court in MFA 6 No. 30131/2010, the respondent Insurance company is liable to pay the compensation amount and require to recover the same from the owner and as such, liability may be fixed both on the owner as well as on the Insurance company.
11. Per contra, learned counsel appearing for the Insurance company Sri. M.Y. Katagi contended that the tribunal has properly assessed the income at Rs.3,000/-
in the absence of formal proof produced by the claimant-
petitioner and further contended that the claimant being the unauthorized passenger in a goods vehicle, Insurance company is not liable to make any payment.
12. It is also his argument that the tribunal has granted the compensation on other heads exorbitantly and sought for reduction.
13. Learned counsel for the Insurance company submitted that the impugned award needs to be modified in as much as the tribunal granting a sum of Rs.20,000/- towards loss of amenities of life and as well 7 as Rs.20,000/- towards loss of expectation of life cannot be countenanced in law.
14. In view of the rival contentions urged by the parties, the following points would arise for consideration of this court:
1. Whether the claimant has made out a case for grant of enhancement of the compensation?
2. Whether the Insurance company is liable to pay the compensation and recover the same from owner, in the light of the full bench judgment of this court in MFA No.30131/2010.
15. The answer for the above points is affirmative for the following :
REASONS
16. In the present case, the claimant who was traveling in the vehicle bearing No.KA-24-2636 and met 8 with an accident, whereby he sustained grievous injuries, is not in dispute.
17. The tribunal after considering the entire evidence on record, came to the conclusion that the claimant failed to prove that he worked as hamal and therefore, he traveled in the goods vehicle, accordingly, rejected the claim against the Insurance company.
18. The owner has not preferred any appeal and therefore, the adjudged compensation as against Rs.1,64,500/- has become final insofar as owner is concerned.
19. The main ground on which the learned counsel for the appellant is seeking enhancement is that the tribunal has miscarried itself in assessing the monthly income at Rs.3,000/- and it should have been Rs.3,500/-. The tribunal found that the claimant failed to prove his monthly income and therefore, assessed the monthly income at Rs.3,000/- notionally.
920. This court and Lok Adalat have consistently assessed the notional income at Rs.3,500/- for the accident which has occurred in the year 2004-2005.
Therefore, this court is of the considered opinion that in the present case also the monthly income needs to be assessed at Rs.3,500/- notionally.
21. Further, the tribunal has applied the multiplier of 16 taking into the age of the claimant as 29 years. On this aspect of the matter, the learned counsel for the appellant-claimant submits that the tribunal ought to applied the multiplier of 17.
22. If the monthly income assessed at Rs.3,500/-
then there will be enhancement of Rs.11,120/- under the head of future earnings by applying multiplier of 17 as against 16 as applied by the tribunal.
23. In the decision of Hon'ble Supreme Court in Sarala Verma (Smt) and others V/s. Delhi Transport Corporation and another, reported in (2009) 6 SCC 10 121, it is held that for the claimants in the age group of 25 to 30 years, the appropriate multiplier is 17.
24. Therefore, this court finds that the submission made by the learned counsel for the appellant '17' multiplier, has to be accepted.
25. As such, the appellant-claimant is entitled for enhancement of monthly income from Rs.3,000/- to Rs.3,500/- and to apply 17 multiplier. Accordingly, on the head of loss of future earning to the extent of disability will increase from Rs.46,000/- to Rs.57,120/-.
So also on the loss of income during the laid up period, the claimant would be entitled for enhancement of Rs.1,500/-. Accordingly, the award passed by the tribunal needs to be modified.
26. The next issue is with regard to liability of Insurance company to pay the compensation amount and recover the same from the owner.
27. As law existed, as on the date of impugned award, the tribunal came to the conclusion that the 11 claimant was an unauthorised passenger traveling in a goods vehicle, the owner was held liable to pay the compensation and as such, there was no order to pay the compensation insofar as Insurance company is concerned.
28. In this regard, the learned counsel for the appellant-claimant drew the attention of this court to the latest Full Bench judgment of the Hon'ble High Court passed in MFA No.30131/2010, particularly to paragraph Nos.30 to 33, 40 and 46, the said paragraphs are carried out hereunder for ready reference.
"30. Now, we will discuss the catena of rulings of the Hon'ble Supreme Court, prior to and subsequent to the Larger Bench ruling of the apex Court in National Insurance Co. Ltd. Vs. Swaran Singh and Others reported in (2004) 3 SCC 297 (hereinafter referred to as 'Swaran Singh' for brevity), as in that judgment, the aforesaid provisions have been dealt with in detail. We are only relying on the aforesaid decision with reference to the liability of the insurer with reference to breach of conditions in the policy as recognized 12 under Section 149(2) of the Act. After thorough examination of various decisions as well as the provisions of law, the apex Court has laid down summary of the findings with reference to the various issues as raised in the said case. The three Judges Bench of the Supreme Court has considered thoroughly the provisions and has laid a foundation as to under what circumstances the Insurance Company can avoid the liability and under what circumstances the Insurance Company is liable to pay the compensation. At paragraph No. 110 of its judgment, the summary of findings, have been enumerated. For the sake of immediate reference, we would like to extract the same as under:
"(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.13
(ii) 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 driver or invalid driving licence of the driver, as contained in sub-
section (2)(a)(ii) of section 149, have to be proved to have been committed by the insured for avoiding liability by the insurer. Mere absence, fake or invalid driving licence or disqualification of the driver for driving at the relevant time, are not in themselves defences available to the insurer against either the insured or the third parties. To avoid its liability towards insured, the insurer has to prove that the insured was guilty of negligence and failed to exercise reasonable care in the matter of fulfilling the condition of the policy regarding use of vehicles by duly licensed driver or one who was not disqualified to drive at the relevant time.
(iv) The insurance companies are, however, with a view to avoid their liability 14 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 said burden would be discharged, inasmuch as the same would depend upon the facts and circumstance of each case.
(vi) Even where the insurer is able to prove breach on the part of the insured concerning the policy condition regarding holding of a valid licence by the driver or his qualification to drive during the relevant period, the insurer would not be allowed to avoid its liability towards insured unless the said breach or breaches on the condition of driving licence is/ are so fundamental as are found to have contributed to the cause of the accident. The Tribunals in interpreting the policy conditions would apply "the rule of main purpose" and the concept of "fundamental breach" to allow defences available to the insured under section 149(2) of the Act.
15(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 fulfill the requirements of law or not will have to be determined in each case.
(viii) If a vehicle at the time of accident was driven by a person having a learner's licence, the insurance companies would be liable to satisfy the decree.
(ix) The claims tribunal constituted under Section 165 read with Section 168 is empowered to adjudicate all claims in respect of the accidents involving death or of bodily injury or damage to property of third party arising in use of motor vehicle. The said power of the tribunal is not restricted to decide the claims 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 insurer and the insured. The 16 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 17 arrears of land revenue only if, as required by sub-section (3) of Section 168 of the Act the insured fails to deposit the amount awarded in favour of the insurer within thirty days from the date of announcement of the award by the tribunal.
(xi) The provisions contained in sub- section (4) with proviso thereunder and sub- section (5) which are intended to cover specified contingencies mentioned therein to enable the insurer to recover amount paid under the contract of insurance on behalf of the insured can be taken recourse of by the Tribunal and be extended to claims and defences of insurer against insured by relegating them to the remedy before regular court in cases where on given facts and circumstances adjudication of their claims inter se might delay the adjudication of the claims of the victims."
31. We are concerned with the specific guidelines at sub-paragraphs vi, x and xi items of the above summary specifically in order to answer the questions involved in this particular case though the present case deals with a case of an 18 unauthorized passenger in a goods vehicle. The apex court has observed that, even where the insurer is able to prove the breach of the policy condition concerning holding of a valid licence by the transfer of licence to drive during the relevant period, the insurer would not be allowed to avoid liability towards the insured unless the said breach of the condition of driving licence is so fundamental as to have contributed to the cause of 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.
32. In light of the above, we would like to discuss in detail with reference to concept of "rule of main purpose" and the concept of "fundamental breach". According to the Hon'ble Supreme court, there should be a "fundamental breach" of a condition which affected the main purpose of the Act, then only the Insurance Company can avoid its liability. Therefore, it is necessary to examine some other rulings in order to ascertain how the Courts have dealt with breach of conditions with reference to the liability of the insurer under various circumstances bearing in mind whether those conditions are fundamental breach of conditions in 19 order to fasten the liability to the third parties on the insurer. We do not wish to discuss the decisions which are already discussed by the apex Court in the Swaran Singh's case.
33. A three Judge Bench of the apex Court in the case of National Insurance Co. Ltd. Vs. Baljit Kaur and Others reported in (2004) 2 SCC 1 (Baljit Kaur), considered the question, whether, the insurance policy in respect of goods vehicle is required to cover the gratuitous passenger in view of the amendment to Section 147 of the Act. The apex court, after considering all the previous decisions came to the conclusion that the Insurance Company was not liable as the risk of unauthorized passenger in a goods vehicle or gratuitous passengers are not covered under the policy and there is a breach of condition of the policy in carrying a passenger in a goods vehicle. Therefore, the owner of the vehicle was held liable to satisfy the decree. However, at paragraph No. 21, the Court was of the opinion that interest of justice would be sub-served if the Insurance Company was directed to satisfy the award in favour of the claimant, if not, already satisfied and recover the same from the owner of the vehicle. The court also observed that, for the purpose of such recovery, it would not be necessary for the 20 insurer to file a separate suit but it may initiate a proceeding before the executing court as if the dispute between the insurer and the insured was also determined by the Tribunal and the issue being decided against the owner and in favour of the insurer.
40. In a decision reported in (2007) 7 SCC 56 between Oriental Insurance Co. Ltd. and Brij Mohan and Others, (Brij Mohan), the apex Court has observed that, a gratuitous passenger carried in a goods vehicle is not covered under the Act but the Act has extended the statutory cover to the owner of the goods or his authorized representative carried in the vehicle, and not to gratuitous passengers. A direction however was given by the apex Court to 'pay and recover' though it held that, gratuitous passenger was not covered under the policy. Even though the Insurance Company was found to be not liable, by exercising constitutional jurisdiction under Article 142 of the Constitution of India direction was given to satisfy the award made by the Tribunal in favour of the appellant. Therefore, this decision indicates that the extraordinary jurisdiction under Article 142 of the Constitution of India which is available only to the apex Court can be exercised to direct pay and recovery, even when it 21 finds that the liability of the Insurance Company is absent. In spite of that, a direction can be issued by the apex Court to the Insurance Company to satisfy the award and later recover the said amount from the owner.
46. In another ruling reported in (2008) 8 SCC 246 between National Insurance Company Limited and Kaushalaya Devi and Others, the apex Court was dealing with the provisions under Sections 149(2)(a)(ii) and 147 of the Act, with reference to third party cover and the defences available to the insurer and exclusion of insurer's liability. The Apex Court made an observation that due to non coverage of gratuitous passenger in goods carriage and when an accident was caused by the driver of the vehicle not possessing a valid and effective driving licence and deceased was traveling as a gratuitous passenger in goods carriage, the owner alone was liable to pay compensation for death of claimant's son caused by rash and negligent driving on the part of the driver of the truck. Further, the deceased was not the owner of any goods which were being carried in the truck. He had been traveling in the truck for the purpose of collecting empty boxes and he was traveling in the truck for a purpose other than the one for which he was entitled to travel in a public 22 carriage goods vehicle. Holding that the insurer was not liable in such circumstances the Apex Court directed that, if the amount deposited by the insurer had not been withdrawn, the deposited amount be refunded and proceedings for release of the amount could be initiated against the owner of the vehicle. In this case also, having found that there was a fundamental breach of the condition which falls under Section 149 (2) of the Act, the apex Court exonerated the liability of the Insurance Company and categorically held that the owner is liable and Insurance Company cannot be directed to 'pay and recover'.
29. In the said decision after surveying the entire case laws on the point, the Hon'ble Full Bench specifically held that Insurance company is liable to compensate the victim of an accident irrespective of the fact that whether the claimant is an authorised or unauthorised passenger in a goods vehicle and recover the compensation amount from the owner of the vehicle.
30. This court is of the considered opinion that the legal principles enunciated in the said judgment of 23 this court squarely apply the facts of the present case as well and as such, the Insurance company is liable to compensate the victim. Accordingly, point Nos.1 and 2 answered in the affirmative.
31. The learned counsel for the respondent however contended that the tribunal erred in law in awarding compensation of Rs.20,000/- each under the head of loss of amenities of life and happiness and also on the head of loss of expectation of life. This court finds some force in the said contention. However, in the absence of appeal filed by the owner or the Insurance company, at this distance of time, this court is not inclined to interfere with the award passed by the tribunal having regard to the fact that the accident is of the year 2004.
32. In view of the foregoing discussion, the appeal is allowed in part. The claimant is entitled to a total compensation of Rs.1,77,120/- as against Rs.1,64,500/-.
After deducting the compensation amount of 24 Rs.1,64,500/- awarded by the tribunal, the claimant is entitled to enhanced compensation of Rs.12,620/- with interest @ 6% p.a. from the date of petition till realization.
33. However, respondent No.2-Insurance company is directed to pay the said award amount within a period of six weeks from the date of receipt of copy of this order and is at liberty to recover the same from the first respondent-owner.
The deposit of the enhanced compensation shall hold good as per the order of the tribunal.
Draw the modified award accordingly.
The office is directed to send the records as early as possible.
Sd/-
JUDGE MNS/