Andhra Pradesh High Court - Amravati
The New India Assurance Company ... vs Medisetty Venkatalakshmi And 4 Others on 23 March, 2022
Author: Ninala Jayasurya
Bench: Ninala Jayasurya
THE HON'BLE SRI JUSTICE NINALA JAYASURYA
M.A.C.M.A.No.1339 of 2006
JUDGMENT:
The present Appeal is preferred by the appellant-Insurance Company aggrieved by the Judgment and Decree dated 07.01.2005, passed in M.V.O.P.No.78 of 2001 on the file of the Chairman, Motor Accidents Claims Tribunal-cum-IV Additional District Judge, Kakinada (hereinafter referred to as "the Tribunal"), wherein an amount of Rs.2,43,000/- was awarded as compensation with interest @ 9% p.a. against the owner of the vehicle and the insurance company jointly and severally.
2. Heard Mr.Naresh Byrapaneni, learned counsel for the appellant- Insurance Company and Mr.N.Siva Reddy, learned counsel for the respondents-claimants.
3. For the sake of convenience, the parties are hereinafter referred to as they were arrayed before the Tribunal in the Original Petition.
4. The petitioners i.e., wife, parents and minor child of a deceased coolie filed the above said O.P stating inter alia that on 23.04.2000 while the deceased (husband of the 1st petitioner) was returning from Talupulamma Lova in a tractor-cum-trailer bearing registration No.AP5T 5381/5382, the driver of said vehicle (R1) suddenly applied brakes, as a result the deceased fell down from the vehicle and succumbed to injuries on the way to the Hospital. It is further stated that the petitioners sustained loss of source of income due to death of the bread winner in the accident and that the 1st respondent as the driver-cum-owner and 2nd respondent being insurer of the vehicle are jointly and severally liable to pay the compensation quantified at Rs.3,00,000/-. 2
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5. The O.P was contested by both the appellant-Insurance Company and the owner of the above said tractor and trailer.
6. On behalf of the claimants, Smt.M.Venkata Lakshmi, wife of the deceased was examined as P.W.1, the father of the deceased as P.W.2 and one P.Nukaraju, a direct witness to the incident as P.W.3 and Exs.A.1 to A.5 were marked. On behalf of the insurance company, Legal Assistant of the Insurance Company was examined as R.W.1 and Exs.B.1 to B.3 were marked.
7. The Tribunal after considering the evidence on record, partly allowed the claim by awarding a compensation of Rs.2,43,000/- while holding that the respondents 1 and 2 are jointly and severally liable to pay same. The Tribunal further directed the 2nd respondent-Insurance Company to deposit the said compensation and provided that it can recover the amount so paid from respondent No.1, after proving the breach of policy conditions.
8. Aggrieved by the said Judgment and Decree, the present appeal has been preferred by the 2nd respondent-Insurance Company.
9. The learned counsel for the appellant-Insurance Company while referring to the relevant provisions of the Motor Vehicles Act, 1988 i.e., Sections 146, 147 and 149 etc., inter alia, contended that owner of the vehicle is statutorily obligated to obtain an insurance for the vehicle to cover third party risk. He submits that wherever there is coverage, it would be as per the terms of the contract and covers the risk to that extent only. He submits that Section 146 of the Motor Vehicles Act is a mandatory provision providing for obtaining a policy of insurance covering third party risk other than the contracting parties to the Insurance Policy. He submits that limits of liability as provided under Section 147 of the 3 NJS, J Macma_1339_2006 Motor Vehicles Act covers the third parties travelling in the goods vehicle along with the goods as owner or representative of the owner of the goods, but would not cover un-authorized passengers/gratuitous passengers who travel in the goods vehicle, for hire or otherwise. He submits that the risk of the person, who is not covered under the policy cannot be fastened on the insurance company, more particularly, in case of an un-authorized passenger, who is travelling in a goods vehicle. He submits that in the present case, the deceased is an unauthorized passenger travelling in a tractor-cum-trailer, which is a goods vehicle at the time of the accident. He further submits that as laid down by the Hon‟ble Supreme Court in National Insurance Company vs Baljit Kaur and Others1, the term „any person‟ referred to in Section 147 would not include the gratuitous passengers and despite the said legal position, the Tribunal erred in fastening the liability on the insurance company and the same is not sustainable. While referring to the Notifications/Circulars of the Insurance Regulatory and Development Authority (IRDA), the learned counsel would further submit that if the policy is a Comprehensive Policy, it covers the inmates of the vehicle and the passengers travelling in a goods vehicle unauthorizedly would not be covered as they are travelling at their own risk and in violation of the terms of policy. Distinguishing the decision of the Hon‟ble Supreme Court in Shivaraj vs Rajendra2 , the learned counsel would submit that no ratio was laid down in the said case and that the Case Law discussed by the Hon‟ble Supreme Court relates to a different fact situation wherein the vehicles involved therein were not goods vehicles. Further relying on the 1 (2004) 2 SCC 1 2 2018 (1) SCC 432 4 NJS, J Macma_1339_2006 Judgment of the Hon‟ble Supreme Court in National Insurance Company vs. Bommithi Subbhayamma and Others3 and a decision rendered by a learned Judge of Madras High Court in C.Rajappan vs. United India Insurance Company4, the learned counsel would submit that the order of the Tribunal fixing the liability on the insurance company is liable to be interfered with. Making the said submissions, he urges that the appeal deserves to be allowed as the insurance company has no liability in respect of a gratuitous passenger travelling in a goods vehicle and as such, the direction to pay and recover is not sustainable.
10. The learned counsel for the respondents/claimants while refuting the said submissions, on the other hand, contends that the order of the Motor Accidents Claims Tribunal is well reasoned and warrants no interference by this Court. He submits that basing on the decision of a learned Judge of the erstwhile High Court of A.P. in United India Insurance Company vs. Tam Tam Venkat Reddy5 the Tribunal held that the appellant-Insurance Company and the owner of the vehicle are jointly and severally liable to pay the compensation and while directing the payment of the compensation by the insurance company, it was provided that the same can be recovered from the owner of the vehicle. In such circumstances, he submits that no interference is warranted in the present appeal.
11. This Court has considered the submissions made by the respective counsel, perused the material on record and examined the issues with reference to the relevant Case Law.
3 (2005) 12 SCC 243 4 CMA No.3200 of 2011, dated 25.01.2021 5 2004 (2) ALD 775 5 NJS, J Macma_1339_2006
12. On a close scrutiny of the matter, the point that falls for consideration by this Court is whether the liability can be fastened on the insurance company in respect of an un-authorized passenger travelling in a goods vehicle and as to whether the award of the Tribunal in directing the insurance company to pay the compensation and to recover the same from the owner is sustainable?
13. Though the learned counsel for the appellant-Insurance Company made several legal submissions with reference to Sections 146, 147 and 149 of the Motor Vehicles Act, this Court deems it not necessary to deal with the same in extenso, in view of the judgment of the Hon‟ble Supreme Court in National Insurance Company vs. Baljit Kaur and Others' case referred to supra.
14. A three-Judge Bench of the Hon‟ble Supreme Court vide its Judgment dated 06.01.2004 succinctly dealt with the provisions of Motor Vehicles Act dealing with the aspects relating to passengers travelling in goods vehicles and the legal position with reference to the amendments brought in by Motor Vehicles (Amendment) Act, 1994, more particularly, Section 147(1)(b). The Hon‟ble Supreme Court in the said Judgment, held that the effect of the provisions contained in Section 147 with respect to persons other than the owner of the goods or his authorized representative remains the same and although the owner of the goods or his authorized representative would now be covered by the policy of insurance in respect of a goods vehicle, it was not the intention of the Legislature to provide for the liability of the insurer with respect to passengers, especially gratuitous passengers, who were neither contemplated at the time the contract of insurance was entered into, nor was any premium paid to the extent of the benefit of insurance of such category of people.
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15. In Bommithi Subbhayamma‟s case referred to supra, the Hon‟ble Supreme Court by its Judgment dated 21.02.2005 while referring to the Judgment in Baljit Kaur‟s case referred to supra, reiterated that the liability of insurer does not cover gratuitous passengers carried in a goods vehicle.
16. In C.Rajappan‟s case referred to supra, the learned Judge of the Madras High Court while referring to the various Case Laws was not inclined to interfere with the award of the Claims Tribunal directing payment of compensation by the driver-cum-owner of the insured van, while exonerating the insurance company. The learned Judge opined that the directions to the insurance company to pay the amount of compensation at the first instance and to recover the same from the owner as in the case of Shivaraj are issued by the Hon‟ble Supreme Court in exercise of its power under Article 142 of the Constitution of India and such powers have not been vested with the High Courts.
17. The above referred to decisions thus makes it clear that the insurance company is not liable to pay compensation in respect of the persons travelling in a goods vehicle as un-authorized/gratuitous passengers. However, it may be appropriate to mention here that the award in the present case was passed by the Motor Accidents Claims Tribunal placing reliance on the Judgment of a learned Single Judge in Tam Tam Venkata Reddy‟s case referred to supra, and the insurance company was directed to pay the compensation, with liberty to recover the same from the insured by proving the breach of policy conditions. In the said decision, the learned Judge while referring to the decisions of the Hon‟ble Supreme Court in National Insurance Company vs Baljit Kaur and Others[(2004) 2 Supreme Court Cases 1], New India 7 NJS, J Macma_1339_2006 Assurance Co., Ltd., vs Kamla and Others [(2001) 4 SCC 342] and United India Insurance Co., Ltd., vs. Lehru and Others [(2003) 3 SCC 338] held as follows:-
15. If all the above three judgments are read together, the intention of the Apex Court though under different contexts is crystal clear i.e., even if there is violation of the terms and conditions of the policy, either by way of insured vehicle being driven by a driver not possessing valid licence or the insured vehicle carrying gratuitous passengers, or violation of the terms and conditions of the policy in any other manner, the liability of the insurer to pay compensation to the third party - injured, does not cease. At best, the insurer after paying the compensation to the injured can later recover the same from the insured, by proving the alleged breach of policy conditions since the accident occurred prior to 3.12.2002 i.e., the date of the judgment in Asha Rani's case (supra).
16. In the light of the above discussion, the contention of the Insurance Company that it is not liable to pay compensation as there was violation of the terms and conditions of the policy, cannot be sustained and the Insurance Company shall pay awarded compensation first to the claimants and if so chooses can recover the same from the insured by proving the alleged violations of the terms and conditions of the policy.
18. However, it may be appropriate to mention here that while laying down the legal position with regard to liability of the insurance company vis-à-vis gratuitous passengers travelling in goods vehicles, the Hon‟ble Supreme Court at Para 21 of the Judgment in Baljit Kaur‟s case held as follows:-
"The upshot of the aforementioned discussions is that instead and in place of the insurer the owner of the vehicle shall be liable to satisfy the decree. The question, however, would be as to whether keeping in view the fact that the law was not clear so long such a direction would be fair and equitable. We do not think so. We, therefore, clarify the legal position which shall have prospective effect. The Tribunal as also the High Court had proceeded in terms of the decisions of this Court in Satpal Singh (supra). The said decision has been overruled only in Asha Rani (supra).
We, therefore, are of the opinion that the interest of justice will be sub-served if the appellant herein is directed to satisfy the awarded amount in favour of the claimant if not already satisfied and recover the same from the owner of the vehicle. For the purpose of such recovery, it would not be necessary for the insurer to file a separate suit but it may initiate a proceeding before the executing court as if the dispute between 8 NJS, J Macma_1339_2006 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. We have issued the aforementioned directions having regard to the scope and purport of Section 168 of the Motor Vehicles Act, 1988 in terms whereof it is not only entitled to determine the amount of claim as put forth by the claimant for recovery thereof from the insurer, owner or driver of the vehicle jointly or severally but also the dispute between the insurer on the one hand and the owner or driver of the vehicle involved in the accident inasmuch as can be resolved by the tribunal in such a proceeding."
19. Thus, it is clear that the Hon‟ble Supreme Court looking into the facts and circumstances of the said case, disposed of the matter directing the appellant-Insurance Company to satisfy the awarded amount in favour of the claimant, if not already satisfied and recover the same from the owner of the vehicle keeping in view that the Law was not clear for so long with regard to the liability of insurer in respect of passengers travelling in goods vehicles.
20. It may also be appropriate to mention here that subsequently in a number of cases the insurance companies were directed to pay compensation at the first instance and recover later from the insured/owner by applying pay and recover principle. In National Insurance Company vs Parvathneni and another [(2009) 8 SCC 785], a Division Bench of the Hon‟ble Supreme Court formulated the questions for determination by a Larger Bench which reads thus:
"(1) If an Insurance Company can prove that it does not have any liability to pay any amount in law to the claimants under the Motor Vehicles Act or any other enactment, can the Court yet compel it to pay the amount in question giving it liberty to later on recover the same from the owner of the vehicle.
(2) Can such a direction be given under Article 142 of the Constitution, and what is the scope of Article 142?"9
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21. The said reference in Parvathneni‟s case referred to supra was disposed of on 17.09.2013 by three-Judge Bench, keeping the questions of Law open to be decided in an appropriate case.
22. In Shamanna and Another vs. Divisional Manager, Oriental Insurance Company Limited and Others6, the Hon‟ble Supreme Court was dealing with a case where the Claims Tribunal passed an award directing the insurer to pay compensation in respect of a deceased, who was travelling in a jeep and recover the same from the owner of the vehicle. The Claimants therein also filed an appeal seeking enhancement of compensation. The High Court while observing that the power under Article 142 of the Constitution of India is vested only with the Hon‟ble Supreme Court and such power is not vested with the High Court or the Tribunal, set aside the award passed by the Tribunal directing the insurance company to pay compensation to the Claimants and recover the same from the owner of the vehicle as not sustainable.
23. In the appeal, the Hon‟ble Supreme Court after referring to various Case Laws, reversed the Judgment of High Court. The relevant paras of the Judgment may be extracted for ready reference:-
Para 13: Since the reference to the larger bench in Parvathneni case 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 followed in Laxmi Narain Dhut 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 and Laxmi Narain Dhut 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 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.
6 (2018) 9 Supreme Court Cases 650 10 NJS, J Macma_1339_2006
24. In the present case, as noted earlier, Tribunal passed the award following the decision which was rendered by the High Court on 17.02.2004, after the Judgment in Baljit Kaur‟s case was rendered by the Hon‟ble Supreme Court on 06.01.2004 and the said Judgment is binding on the Tribunal. However, in the light of the decision in Tam Tam Venkat Reddy supra, the Tribunal provided that the Insurance Company can recover the compensation from the insured after proving the breach of policy conditions, while holding that the Insured and Insurer are liable to pay compensation. Whether such a direction can be issued when no liability can be fixed or insurer is statutorily not liable and whether directions to pay and recover can be issued under Article 142 of the Constitution of India are larger questions, which are yet to be resolved. However a reading of the decisions of the Hon‟ble Supreme Court in Shamanna and Shivaraj‟s case would go to show that the present position with regard to the directions to pay and recover are in favour of the victims.
25. Shivraj vs Rajendra is a case where the Hon‟ble Supreme Court was dealing with a claim in respect of a gratuitous passenger travelling in a goods vehicle-tractor. The Hon‟ble Supreme Court, in the facts and circumstances, allowed appeal in part and directed insurance company to pay the compensation in the first place and granted liberty to recover the same from the owner of the offending tractor, in accordance with Law. As contended by the learned counsel for the insurance company, the question regarding the liability of the insurance company in respect of a gratuitous passenger in a goods vehicle with reference to the Judgment of Baljit Kaur's case was not specifically dealt with and the directions to pay 11 NJS, J Macma_1339_2006 and recover issued are referable to the exclusive powers vested in it under Article 142 of the Constitution of India, which cannot be exercised by any other Court.
26. However, the Hon‟ble Supreme Court took into consideration the consistent view in the other decisions, with regard to the directions to pay and recover, after recording a categorical finding to the effect that the conclusions of the High Court that the insurance company was not liable for the loss or injuries suffered by the claimant or to indemnify the owner of the tractor is unexceptionable. The relevant findings at Paras 10 and 11 reads thus:
10. The High Court, however, found in favour of Respondent 2 (insurer) that the appellant travelled in the tractor as a passenger which was in breach of the policy condition, for the tractor was insured for agriculture purposes and not for carrying goods. The evidence on record unambiguously pointed out that neither was any trailer insured nor was any trailer attached to the tractor. Thus, it would follow that the appellant travelled in the tractor as a passenger, even though the tractor could accommodate only one person, namely, the driver. As a result, the Insurance Company (Respondent 2) was not liable for the loss or injuries suffered by the appellant or to indemnify the owner of the tractor. That conclusion reached by the High Court, in our opinion, is unexceptionable in the fact situation of the present case.
11. 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 appellant claimant 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, Mangla Ram v.
Oriental Insurance Co. Ltd., Rani v. National Insurance Co. Ltd., and including Manuara Khatun v. Rajesh Kumar Singh. In other words, the High Court should have partly allowed the appeal preferred by Respondent 2. The appellant may, therefore, succeed in getting relief of direction to Respondent 2 insurance company to pay the compensation amount to the appellant with liberty to recover the same from the tractor owner, Respondent 1.
27. In the present case also, the deceased was travelling in a goods vehicle-tractor-cum-trailer and this Court is of the view that the benefit of the said decision cannot be denied to the claimants. 12
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28. Further, this Court feels that it would not be fair or equitable to drive the claimants who lost the bread winner to proceed against the owner of the vehicle at this length of time by interfering with the award. The accident occurred in the year 2000 and the deceased was a coolie. The compensation awarded is a meager sum of Rs.2,43,000/-. Keeping in view the said aspects and that the Motor Vehicles Act is a beneficial legislation, this Court is not inclined to set aside the award of Tribunal in the facts and circumstances of the case. However, it is deemed appropriate to reduce the interest from 9% to 7.5% p.a. Rest of the award stands confirmed.
29. The Appeal is accordingly allowed, in part. No costs.
As a sequel, interlocutory applications, if any pending, shall stand closed.
__________________ NINALA JAYASURYA, J Date: 23.03.2022 IS 13 NJS, J Macma_1339_2006 THE HON'BLE SRI JUSTICE NINALA JAYASURYA M.A.C.M.A.No.1339 of 2006 Date: 23.03.2022 IS