Jammu & Kashmir High Court
Oriental Insurance Company vs Girja Bhat Alias Shashoo on 7 April, 2008
Equivalent citations: 2008(2)JKJ1
Author: J.P. Singh
Bench: J.P. Singh
JUDGMENT J.P. Singh, J.
1. Oriental Insurance Company Limited has filed this appeal against award dated December 21,2004 in Claim Petition No. 385 (Claims) of Motor Accidents Claims Tribunal Jammu awarding an amount of Rs. 12,95,000/- in favour of the claimants along with interest @ Rs. 9% per annum.
2. Learned Counsel appearing for the appellant company submits that Bus No. JK02L-6447 had been carrying 32 passengers at the time it had met with an accident resulting in the death of Avinash Shashoo, the claimants' predecessor-in-interest, besides others as against the authorized capacity of 27 passengers and in that view of the matter the appellant company was not liable to indemnify the owner who had violated the terms and conditions of the policy by plying an overloaded bus.
3. Claimants' counsel on the other hand submitted that owner's plying the vehicle in question with overloaded passengers would not amount to violation of the terms and conditions of the policy and the insurance company cannot absolve itself of its liability to satisfy the award and indemnify the owner in view of the law laid down by Hon'ble Supreme Court of India in National Insurance Company Ltd. v. Anjana Shyam and Ors. reported as 2007 AIR SCW 527.
4. During the course of hearing of this appeal, learned Counsel for the insurance company had conceded that the number of claims arising out of the accident in question was far less than the authorized capacity of passengers in the vehicle in question.
5. I have considered the submissions of learned Counsel for the parties, gone through the records and judgments delivered by Hon'ble Supreme Court of India as also by this Court on the subject.
6. The question raised by learned Counsel for the appellant needs to be answered in view of the law laid down by Hon'ble Supreme Court of India in National Insurance Company Ltd. v. Anjana Shyam and Ors. reported as 2007 AIR SCW 527, where, while dwelling on the question, Hon'ble Supreme Court had held as follows:
15. In spite of the relevant provisions of the statute, insurance still remains a contract between the owner and the insurer and the parties are governed by the terms of their contract. The statute has made insurance obligatory in public interest and by way of social security and it has also provided that the insurer would be obliged to fulfill his obligations as imposed by the contract and as overseen by the statute notwithstanding any claim he may have against the other contracting party, the owner, and meet the claims of. third parties subject to the exceptions provided in Section 149(2) of the Act, But that does not mean that an insurer is bound to pay amounts outside the contract of insurance itself or in respect of persons not covered by the contract at all. In other words, the insured is covered only to the extent of the passengers permitted to be insured or directed to be insured by the statute and actually covered by the contract. The High Court has considered only the aspect whether by overloading the vehicle, the owner had put the vehicle to a use not allowed by the permit under which the vehicle is used. This aspect is different from the aspect of determining the extent of the liability of the insurance company in respect of the passengers of a stage carriage insured in terms of Section 147(1)(b)(ii) of the Act. We are of the view that the insurance company can be made liable only in respect of the number of passengers for whom insurance can be taken under the Act and for whom insurance has been taken as a fact and not in respect of the other passengers involved in the accident in a case of overloading.
16. Then arises the question, how to determine the compensation payable or how to quantify the compensation since there is no means of ascertaining who out of the overloaded passengers constitute the passengers covered by the insurance policy as permitted to be carried by the permit itself. As this Court has indicated, the purpose of the Act is to bring benefit to the third parties who are either injured or dead in an accident. It serves a social purpose. Keeping that in mind, we think that the practical and proper course would be to hold that the insurance company, in such a case, would be bound to cover the higher of the various awards and will be compelled to deposit the higher of the amounts of compensation awarded to the extent of the number of passengers covered by the insurance policy. Illustratively, we may put it like this. In the case on hand, 42 passengers were the permitted passengers and they are the ones who have been insured by the insurance company. 90 persons have either died or got injured in the accident. Awards have been passed for varied sums. The Tribunal should take into account, the higher of the 42 awards made, add them up and direct the insurance company to deposit that lump sum. Thus, the liability of the insurance company would be to pay the compensation awarded to 42 out of the 90 passengers. It is to ensure that the maximum benefit is derived by the insurance taken for the passengers of the vehicle, that we hold that the 42 awards to be satisfied by the insurance company would be the 42 awards in the descending order starting from the highest of the awards. In other words, the higher of the 42 awards will be taken into account and it would be the sum total of those higher 42 awards that would be the amount that the insurance company would be liable to deposit It will be for the Tribunal thereafter to direct distribution of the money so deposited by will be for the Tribunal thereafter to direct distribution of the money so deposited by the insurance company proportionately to all the claimants, here all the 90, and leave all the claimants to recover the balance from the owner of the vehicle. In such cases, it will be necessary for the Tribunal, even at the initial stage, to make appropriate order to ensure that the amount could be recovered from the owner by ordering attachment or by passing other restrictive orders against the owner so as to ensure the satisfaction in full of the awards that may be passed ultimately.
7. and in the light of the view taken by this Court in Oriental Insurance Co. v. Dhanwaniti Devi reported as , where, while dealing with the issue as to whether owner's permitting carriage, of passengers more than the authorized capacity of the passenger vehicle, involved in the accident, would absolve the insurer of its liability to indemnify the owner, it had been held as follows:
Section 149(2) of the Motor Vehicles Act, 1988 permits the Insurance Company to avoid a claim for compensation arising out of the use of the Motor Vehicle on any of the grounds which are as follows:
(a) that there has been breach of a specified condition of the policy, being one of the following conditions, namely:
(i) A condition excluding the use of the vehicle:
(a) For hire or reward, where the vehicle is on the date of the contract of insurance a vehicle not covered by a permit to ply for hire or reward, or
(b) For organized racing and speed testing, or
(c) For a purpose not allowed by the permit under which the vehicle is used, where the vehicle is a transport vehicle, or
(d) Without side-car being attached where the vehicle is a motor cycle; or
(ii) A condition excluding driving by a named person or persons or by any person who is not duly licensed, or by any person who has been disqualified for holding or obtaining a driving licence during the period of disqualification; or
(iii) A condition excluding liability for injury caused or contributed to by conditions of war, civil war, riot or civil commotion; or (b) that the policy is void on the ground that it was obtained by the nondisclosure of a material fact or by a representation or fact which was false in some material particular.
In other words, the liability could be avoided by an insurer only if it could bring its case in any of the conditions prescribed under Section 149(2) of the Motor Vehicles Act, 1988. The Insurance Company cannot avoid its liability to pay compensation arising out of the use of Motor Vehicle for any other violation. This view finds support from National Insurance Company Limited v. Swaran Singh and Ors. reported as and this Court judgment in AIR 2006 (2) JKJ 698 titled Oriental Insurance Co. Limited v. Allahdin and Ors. Over-loading of a motor vehicle does not attract the breach contemplated by Section 149(2) of the Motor Vehicles Act.
Plea raised by Mr. Chouhan that the vehicle was over-loaded and the insurer was not liable to compensate the claimants by indemnifying the owner is thus rejected.
8. In view of the statement of learned Counsel for the appellant that the number of awards made in claim petitions arising out of the accident in question were far less than the authorized passengers carrying capacity of the bus in question, the appellant-Insurance Company cannot deny its liability to satisfy the impugned award, in view of the legal position referred to hereinabove.
9. The sole question raised by appellant's counsel in support of the appeal, having failed, this appeal would merit dismissal.
Cross Appeal No. 4/2005:
10. Learned Counsel appearing for the claimants has not pressed this cross appeal.
11. Civil 1st Miscellaneous Appeal No. 40/2005 and Cross Appeal No. 04/2005 of the claimants are, accordingly, dismissed without any order as to costs.