Karnataka High Court
The National Insurance Co Ltd vs Abdul Salam on 23 July, 2014
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IN THE HIGH COURT OF KARNATAKA AT BANGALORE
DATED THIS THE 23RD DAY OF JULY 2014
BEFORE
THE HON'BLE MR. JUSTICE HULUVADI G. RAMESH
MFA No.3332/2009 (MV)
C/W MFA CROB No.88/2010 (MV)
IN MFA No.3332/2009 (MV):
BETWEEN:
THE NATIONAL INSURANCE CO LTD
SRI MANJUNATHA COMPLEX, BUS STAND ROAD
HASSAN, REP BY ITS ADMINISTRATIVE OFFICE
LEGAL M G ROAD,
BANGALORE ... APPELLANT.
(BY SRI S. SRISHAILA, ADV.)
AND :
1.ABDUL SALAM
AGED 28 YEARS
S/O.ISMAYIL R/O.ANEMAHAL
SAKLESHPUR TALUK
HASSAN DIST
2.ABDUL RAVUF
MAJOR, S/O.S M ABDULLA R/O.PUTTARAJU
VATARA, BALEGARA VEEDHI,
HASSAN ... RESPONDENTS.
(BY SRI B.M. MOHAN KUMAR, ADV. FOR R-1)
*******
THIS MFA IS FILED U/S 173(1) OF MV ACT AGAINST THE
JUDGMENT AND AWARD DATED: 25.2.2009 PASSED IN MVC
NO. 147/2007 ON THE FILE OF THE CIVIL JUDGE (SR.DN) AND
ADDL. MACT, SAKLESHAPURA, AWARDING A COMPENSATION
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OF RS.1,33,500/- WITH INTEREST @ 6% P.A FROM THE DATE
OF PETITION TILL REALISATION.
IN MFA CROB No.88/2010 (MV):
BETWEEN:
SRI ABDUL SALAM
AGED ABOUT 29 YEARS
S/O ISMAYIL
R/O ANEMAHAL,
SAKALESHAPURA TALUK,
HASSAN DIST. ...CROSS OBJECTOR.
(BY SRI A.M. BALAJI & SRI B.M. MOHAN KUMAR, ADVS.)
AND:
1.ABDUL RAVUF
S/O S.M. ABDULLA
PUTTARAJU VATARA,
BALEGARA BEEDI,
HASSAN-573 102,
HASSAN DIST. DRIVER OF LORRY
BEARING NO. KA-13-A-3434
2.BRANCH MANAGER
THE NATIONAL INSURANCE CO. LTD,
SRI MAJUNATHA COMPLEX,
BUS STAND ROAD,
HASSAN-573 201
POLICY NO. 501600:31:03:6317621
VALID FROM
08/09/2003 TO 07/09/2004 ...RESPONDENTS.
(BY SRI S. SRISHAILA, ADV. FOR R-2)
THIS MFA CROB IN MFA.NO.3332/2009 FILED U/O 41
RULE 22 OF CPC, AGAINST THE JUDGMENT AND AWARD
DATED: 25.02.2009 PASSED IN MVC.NO.147/2007 ON THE FILE
OF THE CIVIL JUDGE (SR.DN) AND ADDITIONAL MACT,
SAKLESHPURA, PARTLY ALLOWING THE CLAIM PETITION FOR
COMPENSATION AND SEEKING ENHANCEMENT OF
COMPENSATION.
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THIS MFA & MFA CROB COMING ON FOR FINAL HEARING
THIS DAY, THE COURT DELIVERED THE FOLLOWING: -
JUDGMENT
This appeal is by the Insurer challenging the liability on the ground that there is no Insurance coverage for the owner himself, for having sustained injuries in the accident, since the policy cover is only to the driver for his negligence for which the owner is vicariously liable and also contends that if any premium is paid for personal accident, it is only in respect of driver-cum-owner. The compensation awarded by the Tribunal as Personal Accident is without any basis and when the insurer has to indemnify the owner, if the owner himself sustains injury, the question of payment of compensation to him does not arise at all.
2. On the other hand, in the Cross Objection filed by the claimant, learned counsel relied upon the judgment of the Apex Court in ORIENTAL INSURANCE CO.LTD., Vs. RAJNI DEVI AND OTHERS reported in ACJ 2008 (VOLUME III) 1441 to contend that compensation under Personal -4- Accident insurance is payable as per the premium paid though owner is not a third party.
3. Learned counsel appearing for the appellant also submitted that the Tribunal has no jurisdiction to deal with the matter when the owner himself suffers an injury in the accident. The indemnification is only for 3rd parties as owner-cum-driver and not to the owner himself for the injuries sustained in the accident.
4. It transpires in the case on hand, the accident occurred on 4.6.2004 at around 9.00 a.m. near Anemahal Village in front of the puncture shop on Sakaleshapura Mangalore Road. The claimant was moving as a pedestrian, at that time, a lorry bearing No.KA-13-A-3434 came in a rash and negligent manner in high speed and dashed against him, who is none other than the owner of the vehicle in question. As a result, the claimant/owner sustained grievous injuries and he was immediately shifted to Sakaleshapura Crawford Hospital for treatment.
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5. Claim petition was filed against the Driver - 1st respondent and the Insurer - 2nd respondent of the lorry in question claiming compensation. The claimant has claimed compensation of Rs.2,00,000/-. Respondent No.2 - Insurer contested the matter by filing statement of objections. The stand taken by the insurer is that unless the owner is made necessary party, insurer is not liable, if it is only to indemnify the owner and the insurance premium is issued then insurer is not liable to indemnify the insured. Further the learned counsel also contended the compensation awarded by the Tribunal is also on the higher side, while the negligence is on the part of the driver of the lorry in question. The crux of the objection is that the claimant himself being the owner of the lorry in question, is not entitled to claim any compensation from the Insurance Company. Based on the contentions raised, the Tribunal framed three issues after enquiry, looking into the documents and evidence on record and held that the accident was due to the negligence on the part of the driver of the lorry in question.
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6. The stand taken by the insurer at the outset is that the claim petition itself is not maintainable. So far as awarding the compensation is concerned, the Tribunal held that the Insurance Company is liable to pay the compensation and awarded compensation of Rs.1,33,463/- for the injuries sustained in the accident on the following heads :-
a. For pain and agony due to one grievous injury - Rs.30,000-00 b. For loss of future earning capacity due to 07% permanent functional disability -Rs. 42,840-00 c. For actual medical expenses -Rs. 32,473-00 d. For future medical expenses -Rs. 15,000-00 e. For expenses towards attendants and extra nourishment during the period of in-patience -Rs. 2,100-00 f. For expenses towards conveyance -Rs. 1,050-00 g. For future unhappiness and loss of amenities -Rs. 10,000-00 _______________ Total - Rs.1,33,463-00 _______________ -7-
7. So far as the liability is concerned having noted that there is valid insurance coverage as on the date of the accident, having noted the rival contentions of the parties, 2nd respondent - Insurer has contended that in the present case, the owner of the lorry is not insured. Therefore, insurance company is not liable to indemnify the claimant who is not a 3rd party and who has no coverage of Insurance Policy and also tried to rely upon the decision in NEW INDIA ASSURANCE CO. LTD., VS. MEERA BAI AND OTHERS reported in 2007 ACJ 821 (Supreme Court) wherein the said judgment the ratio laid down was that "Obviously the owner, who is himself driving the vehicle, is not covered under the policy." as per Section 147(1) of the Motor Vehicles Act, 1988) and also relied upon another decision rendered by High Court of Judicature at Bombay, Nagpur Bench, reported in 2007 ACJ 1715 regarding Section 163-A of Motor Vehicles Act, 1988 - where in the said case it was observed, the claim application filed by the legal -8- representatives is not maintainable as the deceased himself was responsible for the accident. Further referring to Section 147(1) of the Act - in the case of personal accident clause provided in the policy wherein the death of the insured liability of the insurance coverage and also when the owner was driving the motor cycle and motor cycle slipped and owner sustained fatal injuries - Insurance Company seeks to avoid liability on the plea that deceased was not a 3rd party covered under the policy. However, it is insured to the extent of Rs.1,00,000/- on payment of extra premium. The Tribunal having adjudicated held Insurance company is liable to pay the entire amount awarded." However, in that context High Court of Judicature at Bombay, Nagpur Bench observed there is liability on the Insurance Company to the extent of Rs.1,00,000/- for having paid the extra premium in the said situation. Thus taking note of the ratio laid down by the Bombay High Court, in the case on hand, the Tribunal held that the Insurance Company has to indemnify the injured to the extent of Rs.1,00,000/- for payment of extra -9- premium in the policy. In the present case, the Insurance Company has collected premium amount of Rs.100/- towards compulsory Personal Accident to the owner. This personal accident covers the owner-cum- driver. However, noting that in the case on hand, it is not a case of the owner himself being the driver of the vehicle in question, he was only owner simplicitor. Accident was caused by the driver of the lorry and not due to the negligence of the owner himself. Stating that the facts of the present case are different from the facts mentioned above, the Tribunal held that the ruling cited above is not applicable to the case on hand, when the Insurance Policy is in force as on the date of the accident and accident was not due to the fault of the owner of the lorry, there is no prohibition to hold the Insurance Company liable. Having held that Insurance Company is liable to indemnify the owner, accident was caused due to the negligence of the driver of the lorry and there is valid insurance policy/coverage - the 2nd respondent insurer is held liable to pay the compensation to the claimants.
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8. The arguments advanced by the learned counsel appearing for the insurer is that as per the policy it will indemnify the owner only for the injury/death caused due to the negligence of the driver. In the case on hand, owner himself cannot claim any compensation and the claim petition itself is not maintainable for his own negligence. Accordingly, sought to contend that the insurer is not liable to indemnify the insured himself for having sustained injury. Indemnification is only to the injury caused to the third parties due to the negligence of the driver or the owner and also contended that in the case on hand, though owner-cum-driver's extra premium is paid by the claimant, he would not be entitled for compensation as a third party.
9. In ORIENTAL INSURANCE CO. LTD., Vs. RAJNI DEVI AND OTHERS reported in 2008 ACJ 1441, the Apex Court referring to Section 163-A of the Act - held that owner cannot be held to be a 3rd party. However, it is held that amount of Rs.1,00,000/- is payable. In the case on hand also there is a premium of Rs.100/- paid
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towards indemnifying the owner himself for the injuries sustained to the extent of Rs.2,00,000/- is the submission of the counsel appearing for the claimant. The Apex Court in the above cited case having paid extra premium towards personal accident claim ordered to pay the compensation as per the policy coverage and extra premium paid.
10. In the case on hand, on a perusal of the policy it is seen Rs.100/- extra premium is paid for Personal Accident Cover to the extent of Rs.2,00,000/-. Accordingly learned counsel for the claimant has sought for enhancement of compensation.
11. In the case of indemnification it is for the insurer to satisfy the liability of the insured as per the policy condition. Based on the principle of vicarious liability for the act of the servant, master is liable, in which case if the driver commits accident and the vehicle is insured, owner is liable to pay compensation. However, responsibility of paying compensation is on the Insurance Company once a person pays premium and
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takes the policy and during the subsistence of policy, if any untoward incident happens by way of accident, it is for the insurer to indemnify the owner. Even under the Workmen's Compensation Act, if any accident occurs due to the negligence of driver himself and vehicle is insured to cover the risk of the owner for the accident that occurs during the course of employment though due to the negligence of the driver, necessarily Insurance coverage is there and ultimately even for the death/injury caused to the driver himself under the provisions of the Workmen's Compensation Act, when the accident occurs during the course of the employment, it is for the Insurance Company to indemnify the owner and pay the compensation.
12. In the case on hand, it transpires that the vehicle in question was validly insured with the 2nd respondent. The owner is not a driver nor he has committed any default, but due to the negligence of the driver the accident occurred and hit the owner of the vehicle and he has sustained grievous injury in the accident. For
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the purpose of policy he is a third party, since he was neither driver of the vehicle nor he was inmate along with the driver In the usual course, if any accident occurs by the driver due to his negligence while the owner would be cross-examined the right of finding out the default on the part of the driver lies on him, now the question is whether owner would be entitled to claim compensation. The general line of argument is that the owner cannot be considered as third party for the purpose of claiming compensation for the injuries on the ground that Insurance company cannot indemnify the owner and not only for the purpose of protecting him for liability also not to extend compensation to him in the event he has suffered injury for his own fault and even he cannot be treated as a third party.
13. There is also a clause provided under the India Motor Tariff GR.36 (General Regulation) - in case of Personal Accident (PA) Cover under Motor Policy - A. Compulsory Personal Accident Cover for Owner-Driver -
"Compulsory Personal Accident Cover shall be applicable
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under both Liability only and Package policies. The owner of insured vehicle holding an 'effective' driving license is termed as Owner-Driver for the purposes of this section.
Cover is provided to the Owner-Driver whilst driving the vehicle including mounting into/dismounting from or traveling in the insured vehicle as a co-driver."
14. It is noted in the provision also that Compulsory Personal Accident cover would be applicable only if he possess 'effective' driving license. The provision is provided in the policy by receiving extra premium cover for the Personal Accident. May be that accident would be caused by the driver or owner himself as a driver- cum-owner, that situation may also be there, but the Apex Court referred to the injury caused to the owner himself referring to the extra premium paid for owner's Personal Accident Cover and held that owner is entitled for compensation as per the premium paid.
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15. This situation is confronted with the owner himself having suffered injury while moving on the road as a pedestrian and he met with the accident due to the negligence of the driver of the lorry. If a separate provision is provided by way of Personal Accident Cover, for which extra premium is collected, then the owner would be entitled to compensation. Now the situation confronted here is - the vehicle is duly insured, the owner is neither a passenger in the vehicle nor is a driver, the accident has occurred due to the negligence of the driver of the lorry, but in the usual course, when the driver was driving the vehicle which was duly insured by the owner, to that extent claimant becomes 3rd party for the purpose of the accident as he was neither inmate nor driver. Now he sustained injury as well as he possessed valid insurance cover for the vehicle.
16. Section 147 of the M.V. Act clause 5 provides for the "insurer issuing a policy of insurance shall be liable to indemnify the person or classes of persons specified in
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the policy in respect of any liability which the policy purports to cover in the case of that person or those classes of persons." The purpose of indemnification is to indemnify the loss suffered by the owner due to the negligence of third persons, if any accident occurs as per the provisions of M.V. Act or any other liability arises on the owner, whether the owner is not entitled to get the compensation for the injuries sustained by him in the circumstances, has to be considered though normally the motor vehicles insurance provides for liability to indemnify the owner and when owner himself stands in the position of a third party for the purpose of payment of compensation is concerned, when the accident occurred due to negligence on the part driver of the vehicle. The logic of the learned counsel for the insurer to say owner himself has suffered injury, since he is liable to pay for others, he cannot claim compensation for himself and the claim petition itself is not maintainable appears to be perverse approach. The owner himself or the driver-cum-owner or the third party, if suffer injury, for the practical purpose the
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owner is to be treated as legal fiction and if the owner has suffered an injury due to the negligence of the driver and if the vehicle is duly insured by the insurance company to indemnify with the insurer, necessarily payment of compensation to the injured for personal medical expenses for the goods or himself invariably arises and the policy itself indemnifying the owner of the vehicle for which extra premium is paid is valid, then in that context the owner who has sustained injury due to the act of the driver's negligence who is person/owner would be legal fiction in which case, the owner is to be indemnified by the insurance company. Just because he is owner himself does not necessarily disentitle him, or not entitled for compensation and whatever the loss or injury or death due to the negligence, if the vehicle is duly insured and insurance policy is valid, it is the liability of the insurance company to make good such loss. The person himself being the owner, even the provision provides for extra cover premium for personal damage to the owner himself. In the case on hand, when extra premium is
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paid for Personal Accident cover then necessarily Insurance Company would not be exonerated from paying the compensation.
17. In that view of the matter, I do not find any illegality in the judgment and award passed by the Tribunal in fastening the liability on the Insurance Company, since separate premium has been paid. Apart from that, "for this purpose the owner is treated as third party and for the purpose of coverage of insurance, the owner is to be treated as legal fiction".
18. So far as enhancement of compensation is concerned claimant has sustained fracture of both the bones of right leg and he has sustained permanent disability of 20% to the limb and to the extent of 7 to 8% to the whole body, thus the claimant would be entitled for another sum of Rs.50,000/- over and above the compensation awarded by the Tribunal with interest at the rate of 6% p.a. from the date of petition till the date of deposit.
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19. Since even extra premium of Rs.100/- is paid towards Personal Accident cover, there would be no impediment for the Insurance Company to pay the compensation.
20. The appeal filed by the Insurance Company is dismissed. The MFA Cross Objection filed by the claimant is allowed in part. Insurer to deposit the amount within three months.
21. The amount in deposit be transferred to the MACT, Sakaleshapura, for disbursement.
Sd/-
JUDGE NG*