Madras High Court
New India Assurance Co. Ltd. vs Rahamed And Ors. on 9 March, 2004
Equivalent citations: 2006ACJ994
Author: S.R. Singharavelu
Bench: P. Sathasivam, S.R. Singharavelu
JUDGMENT C.M.A. 420 of 1997: S.R. Singharavelu, J.
1. New India Assurance Co. Ltd. is appellant herein. Appeal has been preferred against the award dated 18.10.1995 passed in M.C.O.P. No. 21 of 1995 on the file of the Motor Accidents Claims Tribunal (Subordinate Judge), Kulithalai for a sum of Rs. 95,000.
2. The accident took place at 5 a.m. on, 19.2.1988 in the main road between Karur and Trichy and near Mayanoor Kasa Colony when the lorry bearing registration No. TDC 4321, which was rashly and negligently driven by Rajendran, respondent No. 10 herein and it hit against the tamarind tree on the left side of the road. In the said accident one Noor Mohamad who was seated beside the driver sustained injuries and later on succumbed to the same.
3. Respondent No. 11 herein, Vijayalakshmi, is the owner of the lorry. The appellant herein is the insurer of the said lorry. The widow, six children and parents are claimants. They claimed a compensation of Rs. 1,50,000 and what was awarded is Rs. 95,000.
4. Before the Tribunal, claimant No. 1 was examined as PW 1 besides one Syed Mohamed as PW 2. One Natarajan was examined as RW 1. Exh. Al to Exh. A6 and Exh. B1 and Exh. B2 respectively on the side of the claimants and respondents were marked. Exh. Al is the copy of the first information report. Exh. A3 is copy of the sketch depicting the topography of the place of accident. The driver of the lorry has been charge-sheeted before the First Class Magistrate at Kulithalai where he was convicted. PW 2 also narrated the event. From the above oral and documentary evidence the negligence on the part of the driver of the lorry was established. Thus, respondent Nos. 10 and 11 and the appellant herein were held liable to pay compensation.
5. From the post-mortem certificate and the evidence of PW 1, the age of the deceased was rightly fixed as 40. So the multiplier was taken as 15. The deceased was said to have been doing the business of tamarind. A minimum of Rs. 500 per month was taken as his contribution to the family, thus making Rs. 6,000 per annum. By applying the multiplier of 15 the pecuniary loss was calculated at Rs. 90,000 and added to which a sum of Rs. 2,500 each on the heads of loss of love and affection and funeral expenses made the total sum of Rs. 95,000.
C.M.A. No. 485 of 1997:
6. Aggrieved over the award dated 18.11.1996 in the M.C.O.P. No. 759 of 1994 on the file of Motor Accidents Claims Tribunal (Third Additional Subordinate Judge), Trichy, United India Insurance Co. Ltd., Madurai-9 has preferred the present appeal.
7. There was an accident at about 2 a.m. on 7.10.1993, in which, the lorry bearing registration No. TN 59-A 3139 belonged to respondent No. 6 and insured with the appellant had capsized while giving way to a van bearing registration No. TN 33-B 2095 belonging to Franch Express, Erode, respondent No. 7 and insured with Oriental Insurance Co. Ltd.
8. Deceased Swamikannu was a load-man in the said lorry. Due to the capsizing of lorry, Swamikannu, who travelled in the said lorry had sustained injury in the said accident and succumbed to the same. Exh. P1 is the copy of first information report. The informant Jayaraman, a co-passenger, has narrated the accident in the said first information report. Periyasamy, PW 2, had also corroborated the same by stating that the driver of the lorry had rashly and negligently driven the said vehicle, applied sudden brake while giving way to the van and thereby the lorry capsized and the inmates including Swamikannu sustained injuries in the said accident. The driver of the lorry admitted the guilt in the criminal proceeding initiated against him and paid fine. The copy of the said judgment was marked as Exh. P3. The sketch was marked as Exh. P4. The post-mortem certificate of the deceased was marked as Exh. P2 wherein also the age of the deceased was given as 30. Considering his avocation as vegetable vendor, the monthly income was fixed as Rs. 1,000 and his contribution was fixed at Rs. 650. The annual loss is Rs. 7,800. By applying multiplier as 13, the pecuniary loss was correctly calculated at Rs. 1,01,400. Rs. 15,000 and Rs. 5,000 were added on the head of loss of love and affection and funeral expenses. The award amount was rightly arrived at Rs. 1,21,400.
Common for both C.M.As.:
9. In both the cases, there is no need for any interference in the quantum of award as the income and multiplier were properly taken into consideration based upon the available evidence.
10. The sole question arises for consideration is as to whether at all a non-fare passenger travelling in a goods vehicle along with his goods as its caretaker would be entitled to any compensation at the hands of the insurer?
11. In this connection, it is pertinent to note that the accidents in the above cases took place on 19.2.1988 and 6.10.1993 and so what is applicable is the Motor Vehicles Act, 1939 as amended under the Act 56 of 1969. The Act of the year 1939 was in force till 30.6.1989 when the Act 59 of 1988 came into force with effect from 1.7.1989. It is only the subsequent amendment by the Act 54 of 1994 that brought changes with effect from 14.11.1994 in respect of Section 147 of the new Act with which we are concerned here.
12. The relevant portions of the Motor Vehicles Act under Section 95 of old Act are as follows:
Section 95. Requirements of polices and limits of liability.-(1) In order to comply with the requirements of this Chapter, a policy of insurance must be a policy which-
(a) xxx xxx xxx (b) xxx xxx xxx Provided that a policy shall not be required- (i) xxx xxx xxx
(ii) except where the vehicle is a vehicle in which passengers are carried for hire or reward or by reason or in pursuance of a contract of employment, the 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 occurrence of the event out of which a claim arises...
13. The above Sub-section (ii) of the proviso to Section 95 (1) (b) (ii) is a special addition that was available in the old Act, which was applicable up to 1.7.1989 and which alone will be applicable to the facts of this case as the accidents in this case had occurred on 19.2.1988, etc. This special proviso was taken away from the statute with effect from 1.7.1989 under the Act 59 of 1988 and substituted by Section 147(1) of the new Act, according to which, this portion of the proviso is not made available.
14. By virtue of the proviso to Section 95(1)(b)(ii), what is made clear is that a policy shall not be required to cover the liability in respect of the death of a person being carried in the vehicle at the time of the occurrence of the event, out of which, a claim arises; there is an exception to the proviso and that is where the vehicle is a vehicle in which passengers are carried for hire by reason or in pursuance of a contract of employment. That is to say, when the proviso makes a policy not statutorily required to cover the liability of death of a person being carried in the vehicle, there is an exception, in and by which, the statutory requirement of a policy was mandated if and when the vehicle in which the passengers are carried was for hire or reward or by reason or in pursuance of a contract of employment.
15. In the case on hand, the evidence on record would go to show that the respective deceased were travelling in the lorry involved in the said accident only as persons who should be construed as paid passengers. To make it clear that even though there is no evidence that they were not passengers directly on payment of hire in order to cover the exception to the proviso to Section 95(1)(b)(ii), an argument was advanced that the circumstances in which they travelled in the said vehicles would make them to be construed as passengers for hire.
16. In the case in C.M.A. No. 420 of 1997, both PW 1, the widow of deceased Rahamed and one Syed Mohamad had deposed that the deceased Noor Mohamed who was a trader in tamarind happened to travel in the said lorry escorting his goods of tamarind that was carried in the said lorry on the date of the accident. Of course, he paid charges for the carriage of goods of tamarind.
17. Similarly in the case in C.M.A. No. 485 of 1997 Periyasamy, a co-passenger, deposed that himself and deceased Swami-kannu travelled in the vehicle along with their vegetables and upon paying Rs. 6 per head for such travel. A suggestion was put to a Senior Assistant of the insurance company, RW 1, that the first information report lodged before police described the deceased Swamikannu only as a passenger in the said vehicle.
18. A contention was made on behalf of the claimants in both cases that there was customary practice in the trade that somebody should go along with the goods in protection thereof and it is for the same the deceased had travelled in the said lorry along with the goods. But for the carriage of goods they would not have travelled in the said lorry.
19. Therefore, the questions arise, as mentioned earlier, as to whether the heirs of deceased persons who travelled in the accident goods vehicles prior to the 1988 Act along with the goods carried by the vehicles as custodians thereof, would be entitled for a claim from the insurance company and whether the deceased would be covered by the policy?
20. In this connection reliance was placed on the judgment in the case of Oriental Fire & Genl. Ins. Co. Ltd. v. Ponugoti Ramanamma 1990 ACJ 928 (AP). In that case, what was dealt with was a question as to whether the owner of the goods travelling along with his goods in a goods vehicle was covered by the Act policy. While dealing with the words 'a vehicle in which the passengers are carried for hire or reward', it was construed that these words are wide enough to include the owner of the goods travelling along with the goods for hire or reward. Such a rationale was followed from the judgment of the Division Bench of Karnataka High Court in the case of Channappa v.
Laxman AIR 1979 Kant 93, wherein it was observed as follows:
In fact, in our opinion the hire payable for carrying the goods must be deemed to include the hire for carrying the owner of the goods or his agent or servant who travels in the vehicle along with the goods for their safety, inasmuch as it is impossible for us to think of a binding obligation on the part of the owner of the goods vehicle to carry in it the owner of the goods, who hires the goods vehicle for carrying the goods. Moreover, such obligation to carry the owner of the goods along with his goods in a goods vehicle can only be as a business proposition as opposed to a gratuitous proposition. Hence, we have no doubt in our minds that the legislature by enacting the exception contained in the first part of the proviso has thought of compulsory coverage by insurance of the risk of owners of goods who are entitled to travel in a goods vehicle along with their goods in the event of any risk arising in the course of the user of the vehicle.
21. The same view was taken in the case of T.M. Renukappa v. Fahmida 1980 ACJ 86 (Karnataka) and in Full Bench of Rajasthan High Court in the case of Santra Bai v. Prahlad 1985 ACJ 762 (Rajasthan). In both the cases, a considered view was taken that the owner of the goods travelling along with the goods in the goods vehicle is covered by the Act policy. In the judgment of the Full Bench, the following was observed:
It is a matter of common experience that when the goods are transported in a goods vehicle..., the owner of the goods may not trust the driver of the goods vehicle or other such situations and contingencies may arise where the owner of the goods may like to travel himself along with the goods. He pays consideration for carrying his goods to the owner of the vehicle and in such circumstances, such person would be considered as a passenger being carried in the vehicle for reward. He is not a gratuitous passenger and makes a contract with consideration for transporting his goods and in such circumstances, the insurer should be liable in respect of such death or bodily injury of such person being carried in or upon entering or mounting or alighting from the vehicle at the time of the occurrence of the event out of which a claim arises.
22. In another case-law reported in the case of New India Assurance Co. Ltd. v. K.T. Jose (Kerala), the claimant hired a public carriage goods vehicle for transporting paddy belonging to him and in the course of his business while he was travelling in the lorry which carried his goods, the lorry met with an accident and he sustained injuries. The insurance company contended that the claimant being only a passenger of public carrier goods vehicle is not required to be covered under Section 95 of the Motor Vehicles Act. It was held as follows:
We have already indicated that law countenances passengers travelling in 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 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....
23. Again it has been held in Cheriya Mohammed v. Kamsakutty 1992 ACJ 782 (Kerala), that the owner of the goods travelling in goods vehicle is a passenger for hire and it is unnecessary to find whether there is pleading or proof to the effect that the claimant travelling in pursuance of a contract of employment. Since by interpretation of law when finding as above was given, no factual question and plea or proof are involved.
24. Since the accident in C.M.A. No. 420 of 1997 had occurred on 19.2.1988, what is applicable is the provisions of 1939 Act which was in force till 1.7.1988, on which date, the Act 59 of 1988 came into force. As observed by the Division Bench of the Supreme Court in the case of New India Assurance Co. Ltd. v. Asha Rani , the principle laid down in the judgment reported in the case of Mallawwa v. Oriental Insurance Co. Ltd. , are applicable. The observation made in Asha Rani's case (supra) was as follows:
In Mallawwa v. Oriental Insurance Co. Ltd. (supra), while approving the earlier decision of the court in Pushpabai Purshottam Udeshi's case 1977 ACJ 343 (SC), the court construed the provisions of Section 95 (1) (b) of the Motor Vehicles Act, 1939 and held that while the expression 'any person' and the expression 'every motor vehicle' are in wide terms but by proviso (ii) it restricts the generality of the main provision by confining the requirement to cases 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, therefore, the vehicle had to be vehicle in which passengers are carried. The court further held that the goods vehicle cannot be held to be a passenger vehicle even if the vehicle was found to be used on some stray occasions for carrying passengers for hire or reward. Undoubtedly, Mallawwa's case (supra) was dealing with a situation under the Motor Vehicles Act, 1939.
25. What is stated in the judgment in Mallawwa's case , is the principle enunciated in Pushpabai Purshottam Udeshi's case 1977 ACJ 343 (SC), which is as under:
It is not required that a policy of insurance should cover risk to the passengers who are not carried for hire or reward. As under Section 95 the risk to a passenger in a vehicle who is not carried for hire or reward is not required to be insured the plea of the counsel for the insurance company will have to be accepted and the insurance company held not liable under the requirements of the Motor Vehicles Act.
What was held in that case is, with respect, consistent with our interpretation of Section 95 as it stood before and after its amendment by Act 56 of 1969.
26. In order to arrive at the above conclusion, in the judgment in Mallawwa's case, , reliance was placed on the judgment in the case of New India Assurance Co. Ltd. v. Kanchan Bewa , wherein the following portion has been culled out for reliance:
Being concerned with a beneficial legislation like the one at hand, we would have normally preferred liberal interpretation, but the question is whether, without any extra premium having been paid, the owner of a goods vehicle can claim indemnification from the insurer just because once in a year the goods vehicle had carried a passenger for hire or reward along with the goods. This would perhaps robe the third proviso dealing with coverage of contractual liability lame....
Therefore, it is made clear that as per the reasoning discussed above to the facts in C.M.A. No. 420 of 1997, it is found that the insurance company is liable to pay the compensation to the heirs of the deceased in that case only to the extent the policy made it liable.
27. It was contended by relying upon the judgment in the case of M.K. Kunhimohammed v. P.A. Ahmedkutty 1987 ACJ 872 (SC), wherein the Apex Court had an occasion to consider the limits prescribed under Section 95 (2) (b) (ii) (4) of the Motor Vehicles Act, which prescribed the minimum liability and in that context, the Apex Court held that the insurer is liable to pay up to Rs. 10,000 for each individual passenger.
28. So, it was argued that even though the insurance company was liable, it would be liable only according to the terms of the contract mentioned in the insurance policy and in this case, to a maximum liability of Rs. 10,000. Thus, the insurance company is liable to pay only Rs. 10,000.
29. But, having regard to the fact that it was decided in the case of Oriental Insurance Co. Ltd. v. Nanjappan , it is made clear that it is the paramount duty of the insurance company to pay not only the minimum liability according to the policy, but also the amount to which the insured is personally liable to pay to the claimant. Insofar as the amount that is liable to be paid by the insured, the insurance company has to pay the same and recover the same from the insured.
30. Coming to the case in C.M.A. No. 485 of 1997, the accident had taken place on 6.10.1993, which is subsequent to the Act 59 of 1988 and prior to the amendment of Section 147(1) with effect from 14.11.1994 substituting Section 147 in the Act. Even here the said provision of Section 95 is applicable and it is similar to the facts of the case of Mallika v. S.K. Rajendran , in which case, the Division Bench of our High Court, after referring to various judgments, concluded to the same effect as mentioned for C.M.A. No. 420 of 1997. In para 17 of that judgment of the Division Bench of our High court, it was held that the insurance company is liable to pay the maximum liability found in the policy and the balance shall be paid by the owner of the vehicle. After applying the principle in the judgment of Oriental Insurance Co. Ltd. v. Nanjappan , we hold that the insurance company is entitled to recover the same from the owner after making the payments of the remaining amount liable to be paid by the owner.
31. This is also in consonance with the observations made in the judgment of Asha Rani's case , replacing the verdict in Satpal Singh's case .
32. Thus, both the appeals are disposed of by confirming the quantum of award passed by the Tribunal and with a finding that the insurance company is directly liable to pay only the maximum amount found in the policies, Exh.
B1 in the O.P. No. 21 of 1995 (C.M.A. No. 420 of 1997) and Exh. B1 in O.P. No. 759 of 1994 (C.M.A. No. 485 of 1997) and that it is entitled to recover the balance amount of the award by filing petition in the Tribunal from the owner of the vehicle after making payment as per the award to the claimants. No costs.