Karnataka High Court
The Branch Manager vs M/S Channabasaveshwara Traders on 18 February, 2022
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 18TH DAY OF FEBRUARY, 2022
BEFORE
THE HON'BLE MR. JUSTICE P. KRISHNA BHAT
MISCELLANEOUS FIRST APPEAL NO.8500 OF 2011 (MV)
BETWEEN
THE BRANCH MANAGER,
NEW INDIA INSURANCE CO. LTD.,
(NOW CALLED
THE NEW INDIA ASSURANCE CO. LTD.)
BASAVAKALYANA,
NOW REPRESENTED BY ITS
SENIOR DIVISIONAL MANAGER
AT DO.XII, MAYUR COMPLEX,
KIADB MAIN ROAD, PEENYA,
BENGALURU-560 058.
... APPELLANT
(BY SRI. E.I. SANMATHI, ADVOCATE)
AND
1. M/S. CHANNABASAVESHWARA TRADERS,
LAXMIPURA,
ARSIKERE,
HASSAN DISTRICT-573 103.
2. SMT. LAXMAMMA
W/O S.L. MAHALINGAPPA
AGED ABOUT 50 YEARS,
RESIDENT OF NO.2 AND 3,
SIDDAPURA VILLAGE,
KASABA HOBLI,
TIPTUR TALUK-572 201.
2
3. S.L. MAHALINGAPPA
SINCE DECEASED BY HIS LR
SMT. LAXMAMMA-RESPONDENT NO.2.
...RESPONDENTS
(BY SRI. R.A. DEVANAND, ADVOCATE FOR R2;
NOTICE TO R1 IS HELD SUFFICIENT;
R3-DECEASED.)
THIS MISCELLANEOUS FIRST APPEAL IS FILED UNDER
SECTION 173(1) OF THE MOTOR VEHICLES ACT AGAINST THE
JUDGMENT AND AWARD DATED 08TH JUNE, 2011 PASSED IN
M.V.C NO.47 OF 2006 ON THE FILE OF THE SENIOR CIVIL
JUDGE & JMFC AND ADDITIONAL MOTOR ACCIDENT CLAIMS
TRIBUNAL, TIPTUR, AWADING A COMPENSATION OF
RS.5,03,000/- WITH INTEREST AT 8% PER ANNUM FROM THE
DATE OF PETITION TILL REALISATION.
THIS APPEAL COMING ON FOR HEARING THIS DAY, THE
COURT DELIVERED THE FOLLOWING:
JUDGMENT
This appeal is at the instance of the Insurance Company calling in question the judgment and award dated 08th June, 2011 passed in M.V.C No.47 of 2006 by the Senior Civil Judge & JMFC and Additional Motor Accident Claims Tribunal, Tiptur (for short, hereinafter referred to as 'Tribunal') wherein it seeks to limit its liability to pay compensation awarded only to the extent 3 of Rs.1,00,000/- based on the limited liability taken upon it under the policy issued to the offending vehicle.
2. In the nature of the narrow dispute arising for consideration in this appeal, detailed reference to the facts of the case is unnecessary which in any event has been referred to in great detail in the judgment and award called in question herein.
3. Since, the policy of the Insurance was not produced before the Tribunal which adjudicated the matter, the appellant- Insurance Company has produced the same along with the application in IA.I of 2011 before this Court. Since, the policy of insurance is extremely essential for deciding the dispute arising for consideration in this appeal, the application in IA.I of 2011 is allowed.
4. The only submission made before me by learned counsel appearing for the appellant is that while he has not disputed the quantum of compensation awarded, he is only questioning the liability of the appellant-Insurance company to 4 indemnify the same above and beyond Rs.1,00,000/-. He draws my attention to the policy of insurance produced which clearly states that it is a 'liability only policy' which in other words means 'Act Policy'. He also draws my attention to the schedule of premium which is as follows:
T.P. Basic - 700-00
PA to unnamed passengers - 250-00
Number 5, Amount 1,00,000/-
per person
Compulsory PA to owner cum - 100-00
Driver
Amount 2,00,000/-
WC to Employee - 25-00
5. This clearly shows that in the contract of insurance entered by and between the owner of the offending vehicle and the appellant-Insurer, liability of the Insurance company to indemnify the award amount is limited to an extent of Rs.1,00,000/- per unnamed passenger. The deceased in this case unfortunately was one such passenger in the private Jeep bearing registration No. KA-13-M-478 insured with the appellant and owned by respondent No.1 in this appeal. It was open to 5 the owner to pay additional premium to cover the entire risk of death or personal injury to the passengers in which event insurance company would have been mulcted with the liability to pay the entire compensation awarded in the case of THE BRANCH MANAGER, THE NEW INDIA ASSURANCE CO LTD V. MAHADEV PANDURANG PATIL reported in ILR 2011 KAR 850 at paragraphs 16 and 17 has observed thus:
"16. If the risk of an occupant of a car, inmate of a vehicle or passenger in a private car, is to be covered additional premium has to be paid. If no additional premium is paid their risk is not covered. The statutory liability under Sections 146 and 147 of the Act has to be read with the terms of the insurance policy issued under Section 146 of the Act. But that does not prevent an insurer from entering into a contract of insurance covering a risk wider than the minimum requirement of the statute whereby the risk to gratuitous passengers could also be covered. A third party policy does not cover liability to gratuitous passengers who are not carried for hire or reward, if a liability other than the limited liability provided for under the Act is to be enhanced under an insurance policy additional premium is required to be 6 paid. The liability is restricted to the liability arising out of the statutory requirement under-Section 146 only.
17. In view of the authoritative pronouncement of the apex Court holding that an occupant/inmate/passenger in a private car is not a third party the finding recorded by the tribunal that the insurance policy issued covers the risk of such persons and therefore the insurance company is liable to pay compensation amount is illegal and contrary to the law declared by the apex court. In fact in the policy no additional premium is received by the insurance company to cover the risk of such persons. It is clear from the terminology used in the policy which fact is not in dispute. In one of the cases additional premium is collected to loading the risk of third party only as is clear from the policy that loading was not meant to cover risk of inmates of a private car and therefore merely because an additional premium is collected under the said policy, it cannot be inferred that the risk of inmates of a car are covered. The words are specific that the loading is done in order to cover only third party risk, it is not a case of additional premium being collected to cover the risk of inmates along with third parties. Therefore, in the facts of this case we are satisfied as the insured has not paid additional premium and the insurance company has not collected any additional premium, the risk of the 7 occupants of a private car was not covered. Therefore, liability foisted on the insurance company cannot be sustained and accordingly, it is hereby set aside."
6. In view of the above position of law, the only liability that can be fastened upon appellant is to pay sum of Rs.1,00,000/- out of the total compensation awarded with interest thereon as directed by the Tribunal in the impugned award from the date of the petition till the date of payment. The above appeal is allowed to the said extent.
Amount in deposit if any, shall be transmitted to the Tribunal. The remainder of the award of compensation made by the Tribunal shall be recovered from the owner-respondent No.1 herein.
Sd/-
JUDGE ARK