Gujarat High Court
United India Insurance Co.Ltd vs Fatmaben Ismailbhai on 19 June, 2024
NEUTRAL CITATION
C/FA/1915/2006 JUDGMENT DATED: 19/06/2024
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/FIRST APPEAL NO. 1915 of 2006
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE SANDEEP N. BHATT
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1 Whether Reporters of Local Papers may be allowed
to see the judgment ?
2 To be referred to the Reporter or not ?
3 Whether their Lordships wish to see the fair copy
of the judgment ?
4 Whether this case involves a substantial question
of law as to the interpretation of the Constitution
of India or any order made thereunder ?
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UNITED INDIA INSURANCE CO.LTD.
Versus
FATMABEN ISMAILBHAI & ORS.
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Appearance:
MR MAULIK J SHELAT(2500) for the Appellant(s) No. 1
MR VISHAL C MEHTA(6152) for the Defendant(s) No. 1,2,3,4,5,6
NISHIT A BHALODI(9597) for the Defendant(s) No. 7
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CORAM:HONOURABLE MR. JUSTICE SANDEEP N. BHATT
Date : 19/06/2024
ORAL JUDGMENT
1. This appeal is filed by the appellant-insurance company under Section 173 of the Motor Vehicles Act, 1988 (`MV Act' for short), being aggrieved and dissatisfied with the Page 1 of 16 Downloaded on : Fri Jun 28 21:55:32 IST 2024 NEUTRAL CITATION C/FA/1915/2006 JUDGMENT DATED: 19/06/2024 undefined judgment and award dated 23.8.2005 passed by the Motor Accident Claims Tribunal (Aux.), Rajkot in MACP No.52 of 2000, whereby the claim petition of the claimants was partly allowed and the original opponents were ordered to pay the amount of compensation of Rs.10,82,000/- along with proportionate costs and interest thereon at the rate of 9% p.a. from the date of filing till realization.
2. The brief facts leading to filing of this appeal are such that the alleged incident occurred on 18.8.1999, when the deceased and his son had gone to Ahmedabad to sell groundnut seeds and when they were returning back to their native at Veraval in the truck no.GJ-1T-6899 on 17.9.1999 and when the truck reached nearby the bridge of Madhuvan river, at that time, driver of truck lost control over the steering resulting into falling down the entire truck below the bridge as a result of which, the deceased sustained grievous injuries and succumbed to the injuries for which the heirs and legal representatives of the deceased filed a Claim Case No.52 of 2000 before the MACT (Aux.), at Rajkot for compensation of Rs.15,00,000/-.
3. On issuance of notice, the appellant-insurance company appeared and resisted the claim petition by contending that the deceased was the illegal passenger in the Page 2 of 16 Downloaded on : Fri Jun 28 21:55:32 IST 2024 NEUTRAL CITATION C/FA/1915/2006 JUDGMENT DATED: 19/06/2024 undefined offending vehicle, which was positively a goods vehicle, hence it stands exonerated from remitting the liability of compensation; that the driver of the offending truck was not holding a valid driving licence at the relevant time of accident and therefore, insured has committed breach of terms of policy which exonerated it from liability of compensation; that the age and income of the deceased including dependency of the present claimants was challenged and hence, prayed to dismiss the claim petition, however, the learned Tribunal held both the opponents liable and passed the impugned award, which is challenged by the appellant- insurance company by way of filing this petition.
4. Heard learned advocate Mr.Shelat for the appellant and learned advocate Mr.Mehta for opponent nos.1 to 6 and Mr.Bhalodi for opponent no.7.
4.1. Learned advocate Mr.Shelat for the appellant has submitted that the learned Tribunal has erred in not taking into consideration that in the cross-examination of the claimant no.1, he has admitted that he had no documentary evidence to substantiate the said monthly earning and inspite of the fact on record, the Tribunal has taken the prospective income of deceased at Rs.6,000/- per month; that the learned Tribunal has erred in not considering the fact that the Page 3 of 16 Downloaded on : Fri Jun 28 21:55:32 IST 2024 NEUTRAL CITATION C/FA/1915/2006 JUDGMENT DATED: 19/06/2024 undefined claimant was travelling as unauthorized passenger and is not entitled to any compensation as such passengers in a goods vehicle are not covered under the policy; that the learned Tribunal has deducted only 1/3rd instead of 2/3rd amount from the average prospective income of the deceased. He submitted that the vehicle in which the deceased was travelling was a goods vehicle and the deceased was an unauthorized passenger in the same; that the driver of the offending truck was not holding a valid driving licence at the relevant time of accident and therefore, when the insured has committed the breach of the policy, the appellant-insurance company should have been exonerated from the liability of paying the amount of compensation and at the most, the order of `pay and recover' should have been passed in this case.
4.2 Additionally, learned advocate Mr.Shelat has submitted that the learned Tribunal ought to have granted the compensation as follows:
Income of Rs.4208/- and adding prospective at the rate of 10% which would come to Rs.420, the income would be Rs.4628/-, deducting 1/4th personal expenses, the amount which could be awarded would be Rs.3471/- per month, multiplying it with 12, it would be Rs.41,652/-. As the age of the deceased was 50, multiplier of 13 would be applied and Page 4 of 16 Downloaded on : Fri Jun 28 21:55:32 IST 2024 NEUTRAL CITATION C/FA/1915/2006 JUDGMENT DATED: 19/06/2024 undefined therefore, the total loss of income would come to Rs.5,41,476/-. Adding Rs.2,40,000/- towards loss of consortium and Rs.30,000/- towards loss of estate and funeral, the total compensation which is required to be awarded would be Rs.8,11,476/-. He submitted that as against this, the learned Tribunal has awarded Rs.10,82,000/- which is on a higher side and the same is required to be reduced to the said extent.
He, therefore, submitted that this appeal be allowed on the point of quantum and also on the point of negligence.
5. Per contra, learned advocates for the respondents have submitted that the award of the learned Tribunal is just and proper and there is no need of any interference by this Court. They submitted that the learned Tribunal has calculated the quantum on the basis of the principles laid down in the various judgments of the Hon'ble Apex Court and, therefore, there is no need for interference of this Court in the impugned judgment and award. Even on the point of negligence, the learned Tribunal has relied on the oral and documentary evidence produced before it and came to the conclusion that the truck driver was negligent in driving the vehicle. In nutshell, they submitted that the impugned judgment and award is just and proper and therefore, this Page 5 of 16 Downloaded on : Fri Jun 28 21:55:32 IST 2024 NEUTRAL CITATION C/FA/1915/2006 JUDGMENT DATED: 19/06/2024 undefined appeal may be dismissed.
6. I have gone through the record and proceedings called for from the learned trial Court and also perused the impugned judgment and award.
7. The oral and documentary evidence produced before the learned Tribunal i.e. the FIR, panchanama, deposition of statement of son of the deceased, statement of driver of the truck and statement of cleaner go to show that the truck driver was negligent at the time of the accident due to which the accident occurred and the deceased lost his life and other passengers also succumbed to injuries/caused injuries. However, from the insurance policy and the documentary evidence produced on record, it is clear that the the vehicle in question was a goods vehicle and the deceased was unauthorized passenger in the same and therefore there is a breach of terms of policy.
8. As regards the point of quantum, the learned Tribunal, has after considering the evidence placed on record, determined the income of the deceased at Rs.4208/-, which is not disputed by the learned advocate for the appellant. 10% prospective income would be added which would come to Rs.420/- i.e. Rs.4208 + Rs.420/- = Rs. 4628/-. The age of the deceased was 50 years completed which is coming on record Page 6 of 16 Downloaded on : Fri Jun 28 21:55:32 IST 2024 NEUTRAL CITATION C/FA/1915/2006 JUDGMENT DATED: 19/06/2024 undefined from the oral and documentary evidence on record. As per the judgment of National Insurance Company Ltd. V/s Pranay Sethi & Ors. reported in (2017)16 SCC 680 , the deduction of personal expenses would be 1/4th as the dependents of the deceased were six in number who are the claimants herein. Deducting 1/4th personal expenses i.e. Rs.1157/-, the amount would come to Rs.3471/- per month, multiplying it with 12, it would be Rs.41,652/-.
9. Applying the multiplier of 13 as is laid down in the case of Sarla Verma V/s Delhi Transport Corporation reported in (2009)6 SCC 121 , considering the age of the deceased, the amount would come to Rs.5,41,476/-.
10. As laid down in the judgment in the case of Magma General Insurance Company Ltd. V/s Nanu Ram and Others reported in (2018)18 SCC 130 , the amount of consortium would be Rs.48,500/- per claimant which would come to Rs.48,500 x 6 = Rs.2,91,000/-. The loss of estate and funeral would be Rs.18,150/- under each head.
11. Thus, the total amount of compensation which the original claimants are entitled is as under:
Loss of income Rs.5,41,476/- Consortium Rs.2,91,000/- Loss of Estate Rs.18,500/- Funeral Expenses Rs.18,500/- Page 7 of 16 Downloaded on : Fri Jun 28 21:55:32 IST 2024 NEUTRAL CITATION C/FA/1915/2006 JUDGMENT DATED: 19/06/2024 undefined Total Rs.8,69,476/-
The total amount of compensation which the claimants are entitled is Rs.8,69,476/- as against the amount of Rs.10,82,000/- awarded by the learned Tribunal.
12. As discussed hereinabove, the vehicle in question was a goods vehicle and the deceased was an unauthorized passenger in the vehicle in question, and therefore, the insurance company is not liable to pay the amount of compensation. However, as the manifest object of the provisions of the MV Act is to ensure that the party, who suffers injuries due to the use of the motor cycle, and may be able to get the damages for the injuries sustained/death. If the goods vehicle is used for carrying the passengers, against the terms of insurance policy, as is in the case on hand, the claimants cannot suffer for the technicalities of whether the owner/insurance company should pay the amount. As the vehicle is insured with the insurance company, the insurance company shall first pay the compensation and it is for the insurance company to recover from the owner, if it so wishes.
13. A reference to the following decisions would be fruitful at this stage:
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NEUTRAL CITATION C/FA/1915/2006 JUDGMENT DATED: 19/06/2024 undefined In the case of Shamanna v. Oriental Insurance Co. Ltd. , (2018) 9 SCC 650, it is held in paragraphs 12 to 14 as under:
"12. The above reference in Parvathneni case [National Insurance Co. Ltd. v. Parvathneni, (2009) 8 SCC 785 : (2009) 3 SCC (Civ) 568 : (2009) 3 SCC (Cri) 943] has been disposed of on 17-9-2013 [National Insurance Co. Ltd. v.
Parvathneni, (2018) 9 SCC 657] by the three-Judge Bench keeping the questions of law open to be decided in an appropriate case.
13. Since the reference to the larger Bench in Parvathneni case [National Insurance Co. Ltd. v. Parvathneni, (2009) 8 SCC 785 : (2009) 3 SCC (Civ) 568 : (2009) 3 SCC (Cri) 943] has been disposed of by keeping the questions of law open to be decided in an appropriate case, presently the decision in Swaran Singh case [National Insurance Co. Ltd. v. Swaran Singh, (2004) 3 SCC 297 : 2004 SCC (Cri) 733] followed in Laxmi Narain Dhut [National Insurance Co. Ltd. v. Laxmi Narain Dhut, (2007) 3 SCC 700 : (2007) 2 SCC (Cri) 142] and other cases hold the field. The award passed by the Tribunal directing the insurance company to pay the compensation amount awarded to the claimants and thereafter, recover the same from the owner of the vehicle in question, is in accordance with the judgment passed by this Court in Swaran Singh [National Insurance Co. Ltd. v. Page 9 of 16 Downloaded on : Fri Jun 28 21:55:32 IST 2024
NEUTRAL CITATION C/FA/1915/2006 JUDGMENT DATED: 19/06/2024 undefined Swaran Singh, (2004) 3 SCC 297 : 2004 SCC (Cri) 733] and Laxmi Narain Dhut [National Insurance Co. Ltd. v. Laxmi Narain Dhut, (2007) 3 SCC 700 : (2007) 2 SCC (Cri) 142] cases. While so, in our view, the High Court ought not to have interfered with the award passed by the Tribunal directing the first respondent to pay and recover from the owner of the vehicle. The impugned judgment [ Shamanna v. Laxman, 2016 SCC OnLine Kar 6928] of the High Court exonerating the insurance company from its liability and directing the claimants to recover the compensation from the owner of the vehicle is set aside and the award passed by the Tribunal is restored.
14. So far as the recovery of the amount from the owner of the vehicle, the insurance company shall recover as held in the decision in Oriental Insurance Co. Ltd. v. Nanjappan [Oriental Insurance Co. Ltd. v. Nanjappan, (2004) 13 SCC 224 : 2005 SCC (Cri) 148] wherein this Court held that :
(SCC p. 226, para 8) "8. ... For the purpose of recovering the same from the insured, the insurer shall not be required to file a suit. It may initiate a proceeding before the executing court concerned as if the dispute between the insurer and the owner was the subject-matter of determination before the Tribunal and the issue is decided against the owner and in favour of the insurer."
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NEUTRAL CITATION C/FA/1915/2006 JUDGMENT DATED: 19/06/2024 undefined In the case of Manuara Khatun v. Rajesh Kr. Singh, (2017) 4 SCC 796, it is held in paragraphs 11 to 16 as under:
"11. In reply, the learned counsel for the respondents (insurance companies) supported the impugned order and contended that no case is made out to interfere in the impugned judgment. It was his submission that once it is held and rightly that the insurance company is not liable because the victims were travelling in the offending vehicle as "gratuitous passengers", there did not arise any occasion to pay the awarded sum to the claimants by the insurance company and nor the principle " pay and recover" could be applied against the insurance company in such circumstances thereby making them liable to pay the awarded sum to the claimants.
12. Having heard the learned counsel for the parties and on perusal of the record of the case, we find force in the submission of the learned counsel for the appellants (claimants).
13. The only question, which arises for consideration in these appeals, is whether the appellants are entitled for an order against the insurer of the offending vehicle i.e. (Respondent
3) to pay the awarded sum to the appellants and then to recover the said amount from the insured (owner of the Page 11 of 16 Downloaded on : Fri Jun 28 21:55:32 IST 2024 NEUTRAL CITATION C/FA/1915/2006 JUDGMENT DATED: 19/06/2024 undefined offending vehicle Tata Sumo) Respondent 1 in the same proceedings.
14. The aforesaid question, in our opinion, remains no more res integra. As we notice, it was the subject-matter of several decisions of this Court rendered by three-Judge Bench and two-Judge Bench in the past viz. National Insurance Co. Ltd. v. Baljit Kaur [National Insurance Co.
Ltd. v. Baljit Kaur, (2004) 2 SCC 1 : 2004 SCC (Cri) 370] , National Insurance Co. Ltd. v. Challa Upendra Rao [National Insurance Co. Ltd. v. Challa Upendra Rao, (2004) 8 SCC 517 : 2005 SCC (Cri) 357] , National Insurance Co. Ltd. v. Kaushalaya Devi [National Insurance Co. Ltd. v. Kaushalaya Devi, (2008) 8 SCC 246 : (2008) 3 SCC (Cri) 467] , National Insurance Co. v. Roshan Lal [National Insurance Co. Ltd. v. Roshan Lal, (2017) 4 SCC 803] and National Insurance Co. Ltd. v. Parvathneni [National Insurance Co. Ltd. v. Parvathneni, (2009) 8 SCC 785 :
(2009) 3 SCC (Civ) 568 : (2009) 3 SCC (Cri) 943] .
15. This question also fell for consideration recently in National Insurance Co. Ltd. v. Saju P. Paul [National Insurance Co. Ltd. v. Saju P. Paul, (2013) 2 SCC 41 :
(2013) 1 SCC (Civ) 968 : (2013) 1 SCC (Cri) 812 : (2013) 1 SCC (L&S) 399] wherein this Court took note of entire previous case law on the subject mentioned above and examined the question in the context of Section 147 of the Page 12 of 16 Downloaded on : Fri Jun 28 21:55:32 IST 2024 NEUTRAL CITATION C/FA/1915/2006 JUDGMENT DATED: 19/06/2024 undefined Act. While allowing the appeal filed by the insurance company by reversing the judgment [ Saju P. Paul v.
National Insurance Co., 2011 SCC OnLine Ker 3791 : 2012 ACJ 1852] of the High Court, it was held on facts that since the victim was travelling in offending vehicle as "gratuitous passenger" and hence, the insurance company cannot be held liable to suffer the liability arising out of accident on the strength of the insurance policy. However, this Court keeping in view the benevolent object of the Act and other relevant factors arising in the case, issued the directions against the insurance company to pay the awarded sum to the claimants and then to recover the said sum from the insured in the same proceedings by applying the principle of "pay and recover".
16. R.M. Lodha, J. (as his Lordship then was and later became CJI) speaking for the Bench held in paras 20 and 26 as under : (Saju P. Paul case [National Insurance Co. Ltd. v. Saju P. Paul, (2013) 2 SCC 41 : (2013) 1 SCC (Civ) 968 : (2013) 1 SCC (Cri) 812 : (2013) 1 SCC (L&S) 399] , SCC pp. 52 & 55) "20. The next question that arises for consideration is whether in the peculiar facts of this case a direction could be issued to the Insurance Company to first satisfy the awarded amount in favour of the claimant and recover the same from the owner of the vehicle (Respondent 2 herein).
*** Page 13 of 16 Downloaded on : Fri Jun 28 21:55:32 IST 2024 NEUTRAL CITATION C/FA/1915/2006 JUDGMENT DATED: 19/06/2024 undefined
26. The pendency of consideration of the above questions by a larger Bench does not mean that the course that was followed in Baljit Kaur [National Insurance Co. Ltd. v. Baljit Kaur, (2004) 2 SCC 1 : 2004 SCC (Cri) 370] and Challa Upendra Rao [National Insurance Co. Ltd. v. Challa Upendra Rao, (2004) 8 SCC 517 : 2005 SCC (Cri) 357] should not be followed, more so in a peculiar fact situation of this case. In the present case, the accident occurred in 1993. At that time, the claimant was 28 years old. He is now about 48 years. The claimant was a driver on heavy vehicle and due to the accident he has been rendered permanently disabled. He has not been able to get compensation so far due to the stay order passed by this Court. He cannot be compelled to struggle further for recovery of the amount. The Insurance Company has already deposited the entire awarded amount pursuant to the order of this Court passed on 1-8-2011 [National Insurance Co. Ltd. v. Saju P. Paul [National Insurance Co. Ltd. v. Saju P. Paul, (2013) 2 SCC 41, 55 (footnote 14)] ] and the said amount has been invested in a fixed deposit account. Having regard to these peculiar facts of the case in hand, we are satisfied that the claimant (Respondent 1) may be allowed to withdraw the amount deposited by the Insurance Company before this Court along with accrued interest. The Insurance Company (the appellant) thereafter may recover the amount so paid from the owner (Respondent 2 herein). The recovery of the amount by the Insurance Company from the owner Page 14 of 16 Downloaded on : Fri Jun 28 21:55:32 IST 2024 NEUTRAL CITATION C/FA/1915/2006 JUDGMENT DATED: 19/06/2024 undefined shall be made by following the procedure as laid down by this Court in Challa Upendra Rao [National Insurance Co. Ltd. v. Challa Upendra Rao, (2004) 8 SCC 517 : 2005 SCC (Cri) 357] ."
14. In the judgment in the case of Shivaraj V/s Rajendra and another reported in 2018 ACJ 2755, the Hon'ble Apex Court has held in paragraph 10 as under:
"10. At the same time, however, in the facts of the present case the High Court ought to have directed the insurance company to pay the compensation amount to the claimant(appellant) with liberty to recover the same from the tractor owner, in view of the consistent view taken in that regard by this court in National Insurance Co.Ltd. V.Swaran Singh, 2004 ACJ 1(SC); Mangla Ram v.Oriental Insurance Co.ltd., 2018 ACJ 1300(SC); Rani v.National Insurance Co.ltd., 2018 ACJ 2430(SC) and Manuara Khatun v.Rajesh Kumar Singh, 2017 ACJ 1031 (SC). In other words, the High Court should have partly allowed the appeal preferred by the respondent No.2, Appellant may, therefore, succeed in getting relief of direction to respondent No.2 insurance company to pay the compensation amount to the appellant with liberty to recover the same from the tractor owner (respondent No.1)."
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NEUTRAL CITATION C/FA/1915/2006 JUDGMENT DATED: 19/06/2024 undefined
15. In view of the above discussion, this appeal is partly allowed. The impugned judgment and award dated 23.8.2005 passed in M.A.C.P.No.52 of 2000 is modified to the extent that the claimants are entitled for compensation of Rs.8,69,476/- along with proportionate costs and interest thereon at the rate of 9% p.a. from the date of the claim till the realization from the opponents. However, as the vehicle is insured with the appellant- insurance company and the insurance company is not held liable to pay the amount. However, the insurance company shall first pay the compensation and it is for the insurance company to recover from the insured, if it so wishes.
16. The amount of Rs.2,12,524/- with proportionate cost awarded in excess by the learned Tribunal be refunded to the appellant-insurance company along with accrued interest, if any, from the amount lying with the learned Tribunal. The Tribunal shall also pay to the claimants remaining amount after deducting above mentioned amount by account payee cheque or by RTGS in the bank of claimants without any delay. Hence, the first appeal is partly allowed.
Rest of the award remains as it is. Modified decree be drawn accordingly.
Record and proceedings be sent back to the concerned Tribunal, forthwith.
(SANDEEP N. BHATT,J) SRILATHA Page 16 of 16 Downloaded on : Fri Jun 28 21:55:32 IST 2024